Kenya seeks PPP financing for Vision 2030 projects
By Regina Manyara
Kenya has presented 45 projects to American investors and the Kenyan private sector seeking financing under the Public Private Partnership model.
The Vision 2030 Secretariat says the move confirms with the government’s efforts to integrate the Public Private Partnership financing model as an alternative source of funding of infrastructure projects.
Kenya projects that the economic growth would rise to 6.4 percent next year from an initial forecast of 5.8 per cent this year, as it aims to propel the country to middle-income status in under two decades.
However, several factors threaten to undermine the target such as loss of investor confidence owing to rising insecurity currently being witnessed in the country.
Thus in this regard as well as the need to grow Kenya’s economy the government has presented 45 projects among them key Vision 2030 projects to American investors and the Kenyan private sector seeking financing under the Public Private Partnership model.
In a trade and investment forum dubbed ‘Doing Business in Kenya’ held in Washington DC, Kenyan private sectors discussed partnerships aligned with the Kenyan government’s economic and social transformation blueprint, the Vision 2030.
Speaking in Washington DC, Vision 2030 Ag. Director General Prof. Gituro Wainaina described Kenya’s on-going infrastructural development efforts as key to Kenya’s global competitiveness.
“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,” said Prof. Gituro
Noting that the current development funding gap can only be plugged by bringing together capital and know-how from the public and private sectors, she urged American investors to take advantage of the newly created Public Private Partnerships framework, as they did with the Kenyan Eurobond issuance.
“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%,” added the Vision 2030 head.
As such several flagship projects were presented for financing under a PPP framework including the JKIA Terminal 2 construction, LAPPSET, Tana Delta Irrigation; 5,000MW energy implementation projects and the Nairobi Commuter train.
It is currently estimated that there is an infrastructure funding gap of approximately US$2-3 Billion per year needed to address the infrastructure requirements in the next decade thus the focus on PPPs that have been identified to contribute to easing budgetary constraints on social expenditure, directly enabling the Government to broaden and deepen development.