The African Development Bank Group’s Board of Directors has authorized lending Kenya $150 million to fund a significant highway development project as part of the First Mover Public-Private Partnership (PPP) initiative.
The construction of the A8 and A8 South motorways 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 30 years.
Beginning in Nairobi, Kenya’s capital and economic hub, both highways are significant thoroughfares that penetrate 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 hotspots.
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 neighbors’ 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, manage, maintain, and transfer the two highways over 30 years.
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, industrialize Africa, and enhance the standard of living for Africans.
The Board has now granted its first approval to the first PPP project under the Bank’s recently formed 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 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,” stated Nnenna Nwabufo, Director General for the Bank’s East Africa Region.
Additionally, she said that the initiative is projected to produce immediate development benefits including 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 labor and locally obtained materials, and it is anticipated to produce 1,500 jobs during construction and 200 jobs throughout the operation.
According to African Development Bank (AfDB), its mission is to finance major “infrastructure development, a key driver for progress across the African continent and a critical enabler for productivity and sustainable economic growth”.
This connectedness contributes significantly to human development, poverty reduction, and the attainment of the Millennium Development Goals (MDGs).