The First Mover Public-Private Partnership (PPP) initiative of the government was approved by the Board of Directors of the African Development Bank Group to receive $150 million in financing to assist a major highway development project in Kenya.
The construction of the A8 and A8 South highways will be part of the project.
Both the 57.8 km of two-lane A8 South from Rironi to Naivasha and the current 175 km of A8 road from Rironi to Mau Summit will be upgraded and maintained over the course of 30 years.
Beginning in Nairobi, Kenya’s capital and economic hub, both roads are significant thoroughfares that cross the most densely populated regions of the nation.
They also pass through many counties in Nakuru and Kiambu, which are home to agricultural regions, wildlife refuges, and tourist hot spots.
The roads are also a part of the strategically important “Northern Corridor,” the busiest commercial and transportation route in East Africa, which offers Kenya’s landlocked neighbours gateway access.
The $150 million is part of a DFI tranche provided by the Bank Group’s non-sovereign operation lending window to Rift Valley Highways Limited, a special purpose vehicle registered in Kenya and owned entirely by the VINCI group and Meridiam Infrastructure Africa Fund.
Rift Valley Motorways and the Kenya National Highways Authority (KeNHA) entered into a PPP concession deal in September 2020 to design, finance, construct, operate, maintain, and transfer the two highways over a 30-year period.
The project is in line with Kenya’s Vision 2030 goals and its national plan to promote industrialization through infrastructural growth.
Additionally, it is consistent with the Bank’s infrastructure targets in its Ten-Year Strategy (2013–2022) and three of its High 5 priorities: integrate Africa, industrialise Africa, and enhance the standard of living for Africans.
The Board has just granted its initial approval to the first PPP project under the Bank’s recently established PPP Framework.
“Tolling and concessioning of major trade corridors across the African continent is on the rise as the need for connectivity and integration is amplified by the AfCFTA and the need for alternative financing sources through PPPs, to ensure the sustainability and reliability of trade corridors,” said Bank Acting Senior Director for the Infrastructure and Urban Development Department Mike Salawou.
“One key benefit is that this project will improve the exceedingly poor safety record of the highway, which has been classified as one of the most accident-prone in Kenya,” said Nnenna Nwabufo, Director General for the Bank’s East Africa Region.
Additionally, the initiative is projected to produce immediate development benefits like higher production, commercial efficiency, and time and cost savings.
In the long run, this should encourage economic expansion and improve the standard of living for everyone.
The project features at least 40% local content in the form of labour and locally obtained materials, and it is anticipated to produce 1,500 jobs during construction and 200 jobs throughout operation.