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The Government of Kenya presented 45 PPP projects to US investors in a meeting in New York last week. The government is seeking to gather interest from the private sector in financing the projects under the Public Private Partnership (PPP) model.
Following a successful Eurobond issue that earmarks funds for Vision 2030 projects in transport, energy and agriculture, this presentation confirms that the Government of Kenya aims to integrate the PPP model as a source of funding for infrastructure investments.
Among the projects presented, local media highlights the construction of the Jomo Kenyatta International Airport (JKIA) Terminal 2, Tana Delta Irrigation, 5000 Megawatts (MW) energy implementation projects and the Nairobi commuter train.
Gituro Wainaina, Vision 2030 Director General, stated:
Kenya is keen to expand and upgrade infrastructure to deliver the required efficiency in terms of time and cost to facilitate trade and investment equally important to our intention to attract and sustain private sector investments in critical sectors of the economy. We are happy to note that the recently concluded oversubscribed Eurobond issue by Kenya was 66 % subscribed by US investors with the bonds already trading at the Irish Stock Exchange at 102 %.
Various flagship projects at national and county government level projects will be easily achieved through PPP arrangements in modernising infrastructure in affordable and sustainable ways, with positive impact on the quality of life for all Kenyans.
The Economic Pillar of Vision 2030 sought to improve the prosperity of all regions of the country and all Kenyans by achieving a 10% Gross Domestic Product (GDP) growth rate by 2012.
Kenya spends about US$1.6 billion a year on infrastructure but requires a sustained expenditure of US$4 billion a year, or about 20 percent of its Gross Domestic Product (GDP), over the next decade, according to the Africa Infrastructure Country Diagnostic Report 2010 produced by the World Bank in collaboration with the African Development Bank and other development agencies.
The World Bank is supporting the Kenya PPP program with a US$40 million Infrastructure Finance Public-Private Partnership Project. The project focuses on financing the transaction preparation, institutional support and regulatory reforms necessary to develop a bankable project pipeline that the government can take to market for private sector financing.