China has signed a deal to build a $US3.8 billion ($A4.11 billion) rail link between Kenya's Indian Ocean port of Mombasa and Nairobi, the first stage of a line that will eventually link Uganda, Rwanda, Burundi and South Sudan.

Under the terms of the agreement, Exim Bank of China will provide 90 per cent of the cost to replace the crumbling British colonial-era line with a 609.3 kilometre standard-gauge link and Kenya the remaining 10 per cent.Construction is due to start in October and take three-and-a-half years, with China…