World Bank mobilizing KSh306bn for completion of Kenyan projects in the period between 2023 and 2027.
The World Bank will raise $2.5 billion (Sh306.6 billion) for Kenya to complete a number of private-public partnership projects between 2023 and 2027.
This helps President William Ruto’s goal to use PPPs, or public-private partnerships, to construct cheap homes, water projects, highways, and dams.
PPP, a method by which the government purchases and implements public infrastructure using private sector resources, has been hailed as the solution to Kenya’s high debt levels, as the nation is quickly running out of room to take on additional debts.
The money will be given over the course of four years beginning in 2023, and the World Bank is anticipated to advocate for the implementation of PPPs in order to minimize the country’s risk of default by bringing in more private capital, including finance for the environment and the climate.
Part of this fund will be invested by the International Finance Corporation (IFC), the commercial arm of the World Bank, in transportation and energy projects, inputs and technological services, food processing, and logistics and supply networks.
The Nairobi-Nakuru-Mau toll road is one of the PPP projects that the World Bank is anticipated to assist in the financing, while IFC is anticipated to contribute either debt or equity to the 233-kilometer roadway.
The International Development Association (IDA), another arm of the World Bank Group that helps poor countries, will on its part, provide a partial risk guarantee for the four-lane highway, putting the Washington-based institution at the driver’s seat of the Sh184 billion project.
“Given Kenya’s narrowing fiscal space, the country should accelerate its Public Private Partnership (PPP) programme and take steps to improve governance, increase transparency, minimize opportunities for corruption, and balance risk between public and private sector players,” said the World Bank in a new report, the Country Partnership Framework (CPF).
By end of 2021, there were 45 PPP projects that were either under implementation or in active operation, with six of them being roads totaling 639 kilometers under the Roads Annuity and Tolling Programmes, according to the National Treasury.
The largest of these PPP roads is the 27-kilometer Nairobi Expressway that runs from Westlands Nairobi to Mlolongo in Machakos county.
The toll road, which has since been opened to the public, cost a total of $667.8 million (Sh81 billion) with the Chinese contractor expected to operate it for the next 30 years before it reverts to the government.
Treasury documents show that another 39 were electricity generation projects—both renewable and thermal energy—totaling 3,034 megawatts of installed capacity.