Kenya turns to private investors to bridge infrastructure funding gap

At the official opening of the Africa Public-Private Partnerships Summit in Nairobi, officials called for increased domestic and international investment while highlighting challenges that have slowed the development and implementation of infrastructure projects.

“What we are trying to do right now as a directorate is to see how we can crush on time, shorten the duration for undertaking feasibility studies and then the focus is more on preparing credible transaction documents,” said PPP Directorate Director General Eng. Kefa Seda.

The approach is expected to open up opportunities in sectors including transport, energy, water and agriculture, while attracting investment from pension funds, insurance companies and international financiers.

“Our infrastructure gap is huge, funding gap, we require about 150 billion dollars every year, but we are only able to finance about 60 billion dollars, so we have a gap of about 80, 90 billion dollars every year,” stated PPP Committee Chairperson Dr. Chris Kiptoo.

However, attracting capital will depend on the government’s ability to prepare viable projects, provide clear regulations and build investor confidence.

“Our fiscal space cannot accommodate some of the mega infrastructure projects that we want to do and therefore we are trying to leverage on private capital to see how that can help us deliver on some of the mega infrastructure projects that we want to do,” Seda added.

The government is also reviewing the country’s PPP legal and regulatory framework, with proposed changes expected to address bottlenecks in project development and implementation.

“Experience has taught us that a sound legal framework is important, but it is not enough. We also need capable institutions, skilled professionals, effective coordination and transparent processes,” noted Public Investment and Asset Management PS Cyrell Odede.

For Kenya, the real test of these partnerships will not be the billions of shillings promised by investors, but how quickly that money translates into infrastructure that improves the lives of ordinary citizens.