The African Development Bank (AfDB) Group has approved a US$150 million financing for a major highway development project in Kenya.
This is the first public-private partnership project to be approved by the AfDB board under its recently established PPP framework.
The project will see the development of the A8 and A8 South highways. The existing 175-kilometre A8 road from Rironi to Mau Summit will be transformed into a four-lane carriageway. The 57.8km 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 centre. The roads 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 loan, from AfBD's non-sovereign operation lending window, forms part of a 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 to design, build, finance, operate, maintain and transfer the two highways over a period of 30 years.
“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 African Continental Free Trade Areas (AfCFTA) and the need for alternative financing sources through PPPs, to ensure the sustainability and reliability of trade corridors," says Mike Salawou, AfDB acting senior director for the infrastructure and urban development department,.
The project aligns with Kenya’s Vision 2030 and national strategy to support industrialization through infrastructure development. It also aligns with the bank’s priorities for infrastructure in its 10-Year Strategy (2013–2022) and three of “High 5" priorities: integrate Africa, industrialize Africa, and improve the quality of life for the people of Africa.