Looking to exploit its strategic location, Kenya has been hard at work on mega infrastructure projects. Consultants PwC estimate that bringing Kenya’s infrastructure up to the level of the region’s middle-income countries could boost annual growth by more than three percentage points. Last year a new study showed Kenya contributed the bulk of the $60-billion worth of large capital infrastructure projects implemented in East Africa in 2014.
1: The country last month started started talks with neighbouring Uganda on the financing and construction of an oil pipeline that will link the two countries and ferry crude produced by companies including Tullow Oil Plc.Tullow has found oil in both countries, with Uganda estimating finds at 6.5 billion barrels and Kenya at 600 million barrels. The planned 1,500 kilometers pipeline to the Indian Ocean, which the government estimates will cost about $3.9 billion, will allow the UK company to start exports from joint ventures with Africa Oil Corp. and Total SA. China’s Cnooc Ltd. is also a partner in Uganda.
2: The country is currently building a $3.8-billion railway project—its biggest investment in infrastructure since it gained independence from Britain in 1963. The Standard Gauge Railway Project has been part of the reason for the country’s robust growth projections, with the Treasury pinning its 7% growth target for this year partly on “activities” generated during construction of the 609-kilometre (378-mile) link. The Export-Import Bank of China is funding 90% of the railroad, which will connect Nairobi to Mombasa, East Africa’s biggest port. It’s scheduled to be completed by 2017.
3: BUT the Lamu Port Southern Sudan-Ethiopia Transport Corridor, which envisages the construction of a port, power plant, railway and other facilities, would once underway become the East African country’s biggest infrastructure project. Kenya’s Treasury has estimated the Lapsset project, as it is known, will cost $26 billion. It is also planned to take in resort cities, an international airport and an inter-regional highway. Financing, for one of the most ambitious infrastructure and development projects on the continent, is currently being negotiated.
4: KENYA in July signed an agreement with Canadian solar energy firm SkyPower that paves the way for the Toronto-based company to develop 1-gigawatt of solar power in East Africa’s biggest economy. The developments will take place over five years in a deal that SkyPower values at $2.2 billion. Kenya currently gets about two-thirds of its electricity from renewable sources, chiefly hydropower and geothermal wells that account for 38% and 25% of supplies respectively. It has no solar developments of that scale to date, with this obviously set to change. Kenya is also making a big push in green energy – the country recently unveiled a $900 million, 310-megawatt wind farm in Lake Turkana, and received a $109 million loan from German development bank KfW for the drilling of 20 new geothermal wells.
5: The country is also tarmacking 10,000 kilometres of new road, with contracts worth at least $3.2 billion having been parcelled out, while the African Development Bank is considering lending the Kenya Airports Authority as much as $100 million to fund construction of a new terminal and runway at Jomo Kenyatta International Airport in the capital, Nairobi.The new terminal will have the capacity to handle 20 million passengers a year, compared with the 7 million that the existing terminal, built in 1978, can process. AfDB, as the bank is known, estimates the total cost of the project will be $770 million, including debt of about $425 million.