The Kenyan government is set to terminate a €1.3 billion (Ksh 190 billion) highway contract initially awarded to a French-led consortium, citing unfavorable terms that exposed the state to financial risks.
The deal, signed in Paris in 2020 during former President Uhuru Kenyatta’s visit, was meant to upgrade the 140-kilometer road linking Nairobi and Nakuru into a multi-lane highway under a public-private partnership (PPP) model.
The project, led by France’s Vinci Highways and backed by Vinci Concessions and private equity firm Meridiam SAS, was structured to allow the consortium to recover its investment through toll collections over a 26-year concession period.
However, the Kenya National Highways Authority (KeNHA) raised concerns about clauses that placed the risk of low traffic volumes on the government, and requested a restructuring.
KeNHA said the revised proposal was “unbankable,” leading to a stalemate and the issuance of a formal termination notice.
Compensation to the French firms is expected as part of the cancellation process. No construction work had begun by the time of termination.
Sources familiar with the matter revealed the project will now be handed over to a Chinese contractor, though no official announcement has been made.
Finance Cabinet Secretary John Mbadi recently led a delegation to Beijing, with reports suggesting President William Ruto may visit China later this month.
The shift marks a significant pivot in Kenya’s infrastructure strategy, as the country continues courting Chinese investment amid growing skepticism over Western-backed PPP models.
