KENYA is going to spend about $25 billion on a second port, a crude pipeline and new roads. The goal is to open up key export routes to attract investors who have made oil and gas discoveries.

An agreement has been reached by the Kenyan government and South Sudan, who have an abundance of oil, to construct a 2000 kilometre pipeline. The pipeline will run to northern Kenyan coastal town of Lamu. Construction began in March to clear the way for a deepwater port that will serve Kenya’s underdeveloped North, South Sudan, Ethiopia and Uganda.

The Northern corridor could be an alternative route for South Sudan to export its oil rather than using Sudan. The neighbouring states were on the brink of war after a dispute of oil transport fees erupted earlier this year.

“This is a massive project, equivalent to about two-thirds of Kenya’s annual gross domestic product,” said Mark Bohlund, a sub-Saharan Africa economist with IHS Global Insight who in July attended a conference on Lamu in London. It “could boost growth in the entire region because the overdependence on the Mombasa port has held it back.” Lower transport costs and faster goods movement could help both agriculture and industry, he said.