World Bank Set To Splash Sh306bn On Kenyan Projects

The World Bank will mobilize $2.5 billion (Sh306.6 billion) for Kenya to complete various private-public partnership projects between 2023 and 2027.

This is a boost to President William Ruto’s plan to use PPPs, or Public-Private Partnerships, to build affordable houses, water projects, roads, and dams.

PPP—a mechanism for the government to procure and implement public infrastructure using private-sector resources—has been heralded as the panacea for Kenya’s high debt levels, with the country quickly running out of room to take on more loans.

These funds will be made available over the next four years, beginning in 2023, with the World Bank pushing for the adoption of PPPs to help reduce the country’s risk of default by mobilizing more private capital, including green and climate financing.

The International Finance Corporation (IFC), the World Bank’s private arm, will invest a portion of this war chest in transportation and energy projects, inputs and technology services, food processing, and logistics and supply chains.

The Nairobi-Nakuru-Mau toll road is one of the PPP projects that the World Bank is expected to help finance, with IFC expected to inject either debt or equity into the 233-kilometer highway.

The International Development Association (IDA), another World Bank Group arm that assists poor countries, will provide a partial risk guarantee for the four-lane highway, putting the Washington-based organization in charge 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).

According to the National Treasury, by the end of 2021, 45 PPP projects were either under construction or in active operation, with six of them being roads totaling 639 kilometers under the Roads Annuity and Tolling Programs.

The Nairobi Expressway, which runs from Westlands Nairobi to Mlolongo in Machackos county, is the longest of these PPP roads at 27 kilometers.

The toll road, which is now open 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 returning it to the government.

Another 39 were electricity generation projects (both renewable and thermal energy), totaling 3,034 megawatts of installed capacity, according to Treasury documents.