In an agreement signed on Sunday, China has agreed to put forward $3.8 billion in order to fund the building of a railway which will serve as a link between Kenya's Indian Ocean port of Mombasa and Nairobi.

Once the two cities are connected, the railway will be expanded to include neighbors Uganda, Rwanda, Burundi and South Sudan.

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Under the terms of the agreement, China will fund 90 percent of the venture through Exim Bank of China. The remaining 10 percent will be funded by the Kenyan government.  

The railway will replace the crumbling narrow-gauge track which was built over 100 years ago under British Colonial Rule.

Work on the railway is slotted to begin in October and it is estimated to take three-and-a-half years to complete. China Communications Construction will serve as the main contractor throughout the process.

Once the railroad is complete, officials predict that the cost of moving people and goods cross-country and across borders will fall sharply.

With passenger trains travelling at a top speed of 120km/h (75 mph), and freight trains at a maximum speed of 80km/h, these African countries will also be able to transport citizens and products more quickly and efficiently.

China's President Li, who is on a four-nation tour of African nations, released a statement regarding the importance of the project in building a good relationship between China and African countries.

"This project demonstrates that there is equal cooperation and mutual benefit between China and the East African countries, and the railway is a very important part of transport infrastructure development," he said.

As the second largest economy in the world, China is eager to create a powerful presence on the continent and push for development as it looks for new markets and opportunities that African nations have to offer.