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The board of directors of the African Development Bank Group approved financing of US$150mn to Kenya to support a major highway development project under the government’s first mover public-private partnership (PPP) programme
The project will see the development of the A8 South highways. The existing 175 km A8 road from Rironi to Mau Summit will be transformed into a four-lane carriageway and the 57.8 km two-lane A8 South, from Rironi to Naivasha will be strengthened and maintained over a period of 30 years.
Both roads are major routes stretching across the most densely populated parts of the country, beginning in Nairobi, Kenya’s capital and commercial nerve centre, and traverse several counties in Nakuru and Kiambu, agricultural zones, wildlife reserves and tourism centres. The roads also form part of the strategic 'northern corridor' which is the busiest trade and transport corridor in East Africa, providing gateway access to Kenya’s landlocked neighbouring countries.
The US$150mn from the bank group’s non-sovereign operation lending window forms part of a DFI tranche to Rift Valley Highways Limited – a special purpose vehicle incorporated in Kenya and wholly owned by Vinci group and Meridiam Infrastructure Africa Fund. In September 2020, Rift Valley Highways entered into a PPP concession agreement with the Kenya National Highways Authority (KeNHA) to design, build, finance, operate, maintain and transfer the two highways over a period of 30 years.
The project aligns with the aspirations of Kenya’s Vision 2030 and national strategy to support industrialisation through infrastructure development. It also aligns with the bank priorities for infrastructure in its 10-year strategy (2013–2022) and three of its high five priorities: integrate Africa, industrialise Africa and improve the quality of life for the people of Africa.
This is the first PPP project to be approved by the board under the bank’s recently established PPP framework. Nnenna Nwabufo, director general for the bank’s East Africa Region, said, “One major plus is that this project will improve the extremely poor safety record of the highway which has been identified as one of the most accident-prone in Kenya. In addition, direct development outcomes expected from the project include increased productivity, commercial efficiencies, and time and cost savings. Ultimately this should support economic growth and increase the quality of life of the people.”
The project is expected to generate 1,500 jobs during construction and 200 during operation and has at least 40% local content in the form of labour and locally sourced materials.