Market Intelligence
Electricity Infrastructure Kenya

Kenya Infrastructure

The Kenyan Government is betting on Public Private Partnerships (PPPs) for the delivery of strategic infrastructure projects. The country is grappling with a burgeoning debt portfolio and the Kenyan public have voiced concerns over continued borrowing. The World Bank estimates that Kenya requires an annual spend rate of $4bn over the next decade to close its existing infrastructure deficit which can only be addressed through private sector participation.

Enacted in 2013, Kenya’s PPP Act made it the first country in East Africa to have legislation governing PPPs. The Act has assisted in closing PPP projects including, a) The $1.5B Nairobi-Nakuru-Mau Summit highway, an access-controlled 4-lane, 175-km project awarded to French firm VINCI Concessions for 30yrs and b) The $650M Nairobi Expressway, a 4-lane 27km toll road awarded to China Road & Bridge Construction which will ease traffic from the main airport to the outskirts of the city. Although several projects have been identified as PPPs, the uptake by the private sector has been slow with the current law failing to deliver additional resources.

To address this, Kenyan National Treasury introduced changes to the existing law to address deficiencies identified by potential investors and brings the law in line with international best practices. Some of the changes in the new PPP Bill 2021 include:

  • Directorate and Project Implementation Team to strengthen the institutional and governance structure
  • Five new types of PPP arrangements - brownfields; build transfer; annuity-based design, build, finance & operate; JVs and strategic partnerships.
  • New requirements for Privately Initiated Investment Proposals to ensure they meet national priorities
  • Direct procurement under exceptional circumstances (e.g., Government-to-Government initiated projects)

The PPP Directorate website lists several projects that are planned for private investment in various sectors including roads, bridges, housing, power transmission, energy, healthcare, agribusiness and water & sanitation. Moreover, the Directorate expressed an interest in seeing projects revolving around climate change such as electric bus-rapid-transit (BRT) systems, smart city solutions, and transition from fossil fuel to gas power. In addition to projects focused on climate change, the body highlighted its interest in social impact projects such as sports infrastructure and education.

U.S. companies interested in engaging on any of these projects are encouraged to contact the U.S. Commercial Service for guidance. For more information contact Mary.Masyuko@trade.gov.