Kenya - Country Commercial Guide
Design and Construction

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-13


The construction industry in Kenya is driven primarily by two key infrastructure sectors: transportation and building/housing. The Ministry of Transport and Infrastructure is responsible for policy initiatives and actions with respect to roads, aviation, maritime, rail, housing, and urban development.

Key government agencies within the Ministry include the Kenya National Highways Authority, Kenya Roads Board, Kenya Rural Roads Authority, Kenya Urban Roads Authority, Kenya Ports Authority, Kenya Railways Corporation, Kenya Airports Authority, Kenya Civil Aviation Authority, National Transport Safety Agency, and the National Construction Authority.

According to Business Monitor International (BMI), the Kenyan construction industry is expected to grow by 4.5% in 2021, a decline from 6.3% in 2020 and an indication of a slowdown in the short term. The sector is however expected to shake off the effects of the COVID 19 pandemic to record growth in the medium term. This growth will be driven by large infrastructure projects in roads, ports, and airports in 2022 and beyond. The elections in 2022 will, however, be something to watch. Due to budget constraints, the GOK hopes to realize more infrastructure projects as PPPs.

Tighter monetary policy by the Central Bank of Kenya has continued to provide the impetus for growth in the construction industry. However, the high cost of building materials and bank credit is still constraining demand for new developments. The economic impact of COVID-19 is also being felt in the residential/commercial real estate sector as demand dips due to reduced incomes.

In 2018, the GOK announced an ambitious development agenda dubbed ‘the Big Four’ that aims at addressing issues related to affordable housing, universal healthcare, growing manufacturing and food security. On affordable housing, the GOK’s goal is to build 500,000 homes over the next five years that will begin to address the housing deficit in the country. The GOK is looking to partner with private sector to achieve this goal.

Leading Sub-Sectors

U.S. firms have opportunities in the road and railway construction sectors, and may also offer engineering design, consultancy, and supervision services in partnership with local firms.

Transport Infrastructure: Kenya enjoys an extensive, but uneven, infrastructure that remains superior to that of its neighbors. Nairobi is the transportation hub of Eastern and Central Africa and is the largest city between Cairo and Johannesburg. The Port of Mombasa is the most important deep-water port in the region, supplying the shipping needs of more than a dozen countries despite persistent deficiencies in equipment, inefficiency, and corruption. To remedy these deficiencies, the Port of Mombasa has been undergoing major expansion and re-habilitation.

According to the East African Community’s (EAC’s) Corridor Diagnostic Study, the Northern Corridor, anchored by the Port of Mombasa, is estimated to need $2.1bn in investment, while the Central Corridor served through the Port of Dar es Salaam will need $2bn. Overall, the region needs $20bn to bring transport infrastructure up to standard, which includes road and rail upgrades expansion of airports and ports, as well as an overhaul of the bureaucracy at border posts, which can delay trade.

According to the World Bank, Kenya needs to invest $4bn annually over the next decade to close the existing infrastructure deficit. The transportation infrastructure sector, however, requires additional private sector participation through PPPs to ease the debt burden on the government. To encourage investors, the National Treasury, through the PPP Unit, has strengthened the legal framework governing PPPs and has identified various infrastructure projects for implementation as PPPs. A list of the projects is available on the PPP Unit website .

Regional integration is a key driving force behind growth in the sector. Various regional initiatives include the $23bn multi-modal transport corridor dubbed the “Lamu Port-South Sudan-Ethiopia Transport” (LAPSSET) corridor, which aims to better integrate Kenya, Ethiopia, and South Sudan, with links to a new port at Lamu in northern Kenya. LAPSSET will include a new standard gauge railway, highways, and an oil pipeline, and will provide landlocked South Sudan and Ethiopia with a new export pathway and reduce Kenya’s dependence on the heavily congested port of Mombasa.

Road Infrastructure: Kenya’s existing road network is comprised of 63,575 kilometers of classified roads and 114,225 kilometers of unclassified roads. Out of the total 177,800 kilometers of road networks, both classified and unclassified, only about 16,902 kilometers is paved. A total of 5,681 kilometers of this road network has been identified under Vision 2030 for various interventions including rehabilitating, dividing, resealing, and tarmacking. Additionally, since 2014, the Ministry of Transport and Infrastructure has been implementing an ambitious road annuity program that will see the construction of 10,000kms of road and supporting primary growth sectors through contractor facilitated financing mechanisms. Initial uptake was slow as banks were charging high finance rates, but the program now seems to be picking up after banks and the GOK has agreed on a way forward.

Additional opportunities exist under the LAPSSET Highway component where 1730km of inter-regional highways from Lamu to Isiolo, Isiolo to Juba (South Sudan), Isiolo to Addis Ababa (Ethiopia), and Lamu to Garsen (Kenya) are to be constructed at a cost of $1.4bn financed by both public and private funds. So far, 505km from Isiolo to Moyale is complete and the World Bank has approved a $500m loan for the construction of the 298km section between Lokichar and Nakodok.

Kenya will soon re-introduce toll roads with private sector participation. Currently, five major roads have been earmarked for tolling under a PPP plan including the Nairobi-Nakuru-Mau Summit highway, Thika Road, Nairobi’s Southern Bypass, Nairobi expressway and a second Nyali bridge in Mombasa city. The move is expected to help raise funds for infrastructural development of roads and help maintain existing roads. Another upcoming PPP toll road is the ongoing construction of the 27km JKIA to Westland four-lane expressway at a cost of $650mn, which will include a dedicated lane for large-capacity buses under the bus rapid transit (BRT) plan.

Airport Infrastructure: Kenya has international airports in Nairobi, Mombasa, Eldoret and Kisumu, and domestic airports in Nairobi, Malindi, Lamu and Lokichogio (Turkana), in addition to another 463 aerodromes and airstrips. All public airport facilities are managed by the Kenya Airports Authority (KAA). The aviation industry has been on an upward trend and is projected to grow at 4% per annum through 2030 with passenger traffic growing at 5% annually owing to urbanization, a growing middle class, and an increase in low-cost carriers. The COVID-19 pandemic has dampened these forecasts with international travel grinding to a halt and tourism taking a severe hit.

Several of Kenya’s airports have been earmarked for expansion. An ongoing modernization program at Jomo Kenyatta International Airport (JKIA) will include construction of modern terminals, a national airport masterplan, installation of integrated security systems at all major airports, installation of communication equipment and institutional capacity building. JKIA is the busiest airport in East and Central Africa and is the 7th busiest on the continent. Originally built to serve 2.5 million passengers annually in the 1970s, the ongoing modernization and expansion program at the airport has seen capacity increase to 7.5 million and projects to increase capacity to 20 million passengers by 2030. Kenya intends to build a second runway at JKIA and has received $160mn from AfDB for this project.

Other airport expansion projects include the ongoing expansion or construction of the Malindi, Isiolo and Lokichogio airports, the Suneka airstrip, and rehabilitation of airstrips in all 47 counties. The Malindi Airport expansion valued at $54mn, will enable the facility to handle international flights and includes extension of the existing runway and apron, modern terminal building, control tower, fire & meteorological stations, and enhanced security features. Moi International Airport in Mombasa received $66mn from the French Development Agency (AFD) for rehabilitation and construction of air side pavements, airfield ground lighting and up-grading of power and water supply.

Improvement works at Lokichogio, Lamu, Manda Island and Isiolo Airports have been ongoing with some of these airports already operational with scheduled flights. Provision of airport facilities will strengthen air transport and logistics services along the corridor in readiness for the construction of the three international airports at the three locations in the future.

Maritime Infrastructure: Kenya’s sole seaport in Mombasa is the largest port in East Africa and the second largest in Africa, serving both Kenya and neighboring countries, including Uganda, Rwanda South Sudan, Tanzania, Burundi, and the Democratic Republic of Congo. The Kenya Ports Authority (KPA) is the government agency mandated to maintain, operate, and regulate scheduled seaports along Kenya’s coastline. The Port of Mombasa recently completed Phase 1 of the Mombasa Port Development Project (MPDP), which included construction of a second container terminal, three additional berths, two ship-to-shore cranes and four rubber-tire gantry cranes. The project was funded by the Japanese to the tune of $217mn.

Construction of the Port of Lamu in northern Kenya under the LAPSSET corridor is East Africa’s largest and most ambitious infrastructure project. Upon completion, the $5bn project will consist of 32 berths. The first phase includes dredging and reclamation, construction of three berths and yards, a causeway and road, buildings and utilities and is financed by China at a cost of $700m. Berth 1 is already complete while 2 and 3 are 70% complete. Kenya intends to develop the remaining 29 berths using a PPP model financed by the private sector.

Rail Infrastructure: Kenya’s total rail network has 2,778 kilometers of narrow meter gauge, and is managed by the Kenya Railways Corporation, a state corporation mandated to provide rail and inland waterways transport. In 2017, Kenya completed construction of a 500km standard gauge railway line between Mombasa and Nairobi financed by the Chinese Government at a cost of $3.8bn with a repayment period of 40 years. An additional 120km from Nairobi to Naivasha was completed in 2019 at a cost of $1.5bn with funding from China. 

Nairobi is planning construction of light commuter rail linking Nairobi suburbs with the central business district and will involve the construction of nine railway transport corridors. The project will be implemented as a PPP and is estimated to cost $300mn and will involve the rehabilitation of 60km of existing rail networks in Nairobi.

In May 2017, the Kenya Railways Corporation invited bids for consultancy services for a feasibility study and design of the Mombasa Metropolitan Commuter Rail. The project involves upgrading 280km of railway and construction of two lines each of 80km long linking Mombasa City with Ramisi and Kilifi. There is also a proposed line linking Mombasa to Moi International Airport. In addition, Kisumu city commuter rail project is also in the offing with four lines totaling 320km linking Kisumu with four neighboring towns. The World Bank is providing $300m in financing for the development of the three commuter rail projects.

Under the LAPSSET Railway, a high-speed standard gauge railway to be built on the LAPSSET Corridor will increase the efficiency of trade in bulky and perishable goods in the region.

Commercial Construction: The Kenyan construction sector will continue to be supported by the growing real estate sector, particularly hotels, offices and retail developments as investors continue to enter East Africa through Nairobi. Prominent hotel brands operating in the market or planning to enter in the near term include New York-based hotel group Carlson Rezidor, Hilton, Pullman, Best Western, Starwood Hotels and Resorts Worldwide, and Swiss-based Movenpick Hotels & Resorts. Developments are focused on increasing bed capacity as well as providing conference facilities to adequately cater to rising domestic and international business demands. A report by consultancy firm PwC estimates that the number of available rooms will increase from 18,600 in 2016 to 21,000 in 2021. According to the Kenya Investment Authority, there are 27 global hotel brands that have announced plans to open new or additional facilities by 2023.


Given Kenya’s current high debt burden, the government is increasingly looking to the private sector to implement infrastructure projects either under the Engineering Procurement and Construction (EPC) + Finance model or as PPP projects. Various types of PPPs are available and include management contracts, concessions, Build, Operate, and Transfer (BOT), Build, Own, Operate, and Transfer (BOOT) or Rehabilitate-Operate-Transfer (ROT). A comprehensive list of approved PPP projects is available on the PPP Unit website above.  In addition, companies are welcome to propose projects under the Privately Initiated Investment Proposal (PIIP) model.

The best prospects for U.S. exporters include the supply of new and used construction equipment, such as light and heavy earth-moving equipment, loaders, crawlers, tippers, excavators, compactors, graders, and quarry mining equipment, low-cost road maintenance options, low-cost housing construction technology, and development and planning services. It is important to note that Kenya uses right-hand drive vehicles, so machines with controls in the center are better sellers. Additional opportunities include:

  • A myriad of road, bridge and dam construction and rehabilitation projects.
  • Development of the $23bn Lamu Port-Southern Sudan-Ethiopia Transport (LAPSSET) Corridor Projects including roads, rails, ports, airports, and pipelines.
  • Construction of a $370mn second runway at JKIA and expansion and modernization of several other airports.
  • Development of commuter rail services for the cities of Nairobi, Mombasa, and Kisumu at a cost of $125mn.
  • Various infrastructure PPP projects earmarked by the National Treasury.
  • The 500,000 affordable housing program under the State Department for Housing. Kenya is looking for strategic partners to develop mass low cost and affordable housing. Details can be found on the Boma Yangu website.
  • Nairobi Metropolitan Transport Authority (NaMATA) – Bus Rapid Transport (BRT) facilities within the five counties (Nairobi, Muranga, Machakos, Kiambu and Kajiado). 
  • Opportunities also exist for consultancy and planning services.


  • Affordable Housing Program
  • Kenya Airports Authority
  • Kenya Institute of Public Policy and Research Analysis
  • Kenya Investment Authority
  • Kenya National Highways Authority
  • Kenya Ports Authority
  • Kenya Railways Corporation
  • Kenya Roads Board
  • Kenya Rural Roads Authority
  • Kenya Urban Roads Authority
  • Konza City
  • LAPSSET Corridor Development Authority
  • Ministry of Transport & Infrastructure
  • National Housing Corporation

Public Private Partnership Unit  
Vision 2030

Local Trade Show:

The Big 5 Construct Kenya

For more information on the Design & Construction sector please contact:

Mary Masyuko
Senior Commercial Specialist
U.S. Commercial Service, U.S. Embassy Nairobi
U.S. Department of Commerce | International Trade Administration
Tel: +254 (20) 363-6063;