Delayed Usahihi Expressway back on schedule after Sh470b deal

(L-R) First Lady Rachel Ruto of Kenya, Kenyan President William Ruto, US President Joe Biden and First Lady Jill Biden acknowledge the crowd during an official arrival ceremony on the South Lawn of the White House in Washington, DC, on May 23, 2024. Ruto's visit is the first state visit to Washington by an African leader in more than 15 years.
[AFP]

American firm Everstrong Capital is set to build the 440-kilometre Nairobi-Mombasa Expressway after the government signed a deal with a US firm yesterday.

The project, which has been in the making for years but stalled due to a mix of factors, appears to be back on track after Everstrong Capital signed a project development agreement with the Kenya National Highways Authority (KeNHA). 

The agreement was signed during President William Ruto’s visit to the United States this week and is among a handful of deals that the President and his delegation clinched with various US companies.

The 4 to 6 lane dual carriageway, named 'Usahihi' is projected to cost $3.6 billion (Sh470 billion at current exchange rates). It is expected to reduce traffic congestion and reduce travel time between the two cities.

It got approval to be undertaken through a public private partnership (PPP) model from the National Treasury last year.

“More than just a road, the Usahihi Expressway sets a standard for transparent, sustainable, and community-centred development, fostering economic growth and environmental protection, serving as a global inspiration for ethical development," President Ruto said after the signing.

“It embodies a commitment to transparency, hard work, and the empowerment of Kenyan citizens by engaging them as users, owners, and investors, creating a cycle of localised benefits and ensuring that communities directly reap the rewards of their investment and participation."

As a PPP project Everstrong Capital is expected, together with its partners in a consortium, to design, source for funds and build the road.

It will also operate the road for 30 years during which it will be charging motorists to use the road to recover funds used in construction and maintenance of the road.

“The construction of the Usahihi expressway poses no financial risks to the Kenyan government, as it is structured to operate independently from the Government of Kenya's balance sheet and is projected to be financially self-sustaining,” said a statement released by Everstrong Capital.

“The project anticipates attracting investments totaling $3.6 billion, sourced from international investors, development agencies, pension funds, and an exceptionally large number of Kenyan private investors.”

United States Ambassador to Kenya Meg Whitman said the US Embassy welcomes the signing of a project development agreement, which marks a significant step forward in the construction of a new Nairobi-Mombasa highway.

“This stretch of road is vital for Kenya’s continued economic growth and a new highway will be safer for all drivers, passengers, and pedestrians who depend on this important corridor for work, pleasure, and living,” said Ms Whitman.

The expressway will feature rest stops, wildlife observation points, electric vehicle charging infrastructure and strategically located overpasses based on animal migration patterns to facilitate wildlife migration.

The expressway is expected to reduce travel time to about four and a half hours from the current average of 10.5 hours it takes to travel between Nairobi and Mombasa by road.

Everstrong Capital will work alongside other Engineering, Procurement, and Construction firms, which includes a leading South African Toll Operations company.

Another major deal that was announced includes a $1 billion (Sh131 billion) data centre by Microsoft and G42 that will be built at the KenGen Green Energy Park at Olkaria.

The data centre will run on 100 per cent renewable geothermal power at the Olkaria Geothermal fields in Naivasha. 

Microsoft and G42, a leading AI and cloud computing company based in the UAE, committed to developing a renewable energy-powered cloud data centre in Kenya. 

The Microsoft-G42 Olkaria data centre campus is scheduled to break ground in the third quarter of this year, with the  East Africa Cloud Region expected to go live within 24 months. 

“This is the second Tier IV Data Centre that KenGen Green Energy Park is hosting, following a groundbreaking ceremony last year with Konza Technopolis Development Authority in Olkaria, Naivasha, in a move we believe will catalyse industrialisation in the region,” said KenGen chief executive Peter Njenga.

US President Joe Biden (L) and Kenyan President William Ruto survey a military honor guard during an official arrival ceremony on the South Lawn of the White House in Washington, DC, on May 23, 2024. Ruto's visit is the first state visit to Washington by an African leader in more than 15 years.
[AFP]

Another major deal is the planned Sh23 billion investment by Coca Cola over the next five years to expand its operations in the country.

“The Coca-Cola system has been an integral part of Kenya’s landscape for more than 75 years. Today, we are excited to announce our intention to strengthen this legacy through a substantial investment,” said Sunil Gupta, CEO of Coca-Cola Beverages Africa when he hosted President Ruto at the company’s headquarters in Atlanta.

“This investment is aimed at accelerating the Coca-Cola system’s capacity and capability expansion over the next five years. Our decision to invest underscores our belief in the long-term potential of Kenya’s economy."

Kenya and the US also signed a framework for cooperation to support new partnerships between universities and industry. The move, according to USAid, is expected to drive innovation, research, and job growth in STEM-related fields in Kenya and globally.

USAid Counselor Clinton White signed the Enhancing Science, Technology, Engineering, and Math (STEM) Education for Economic Development Framework for Cooperation alongside Prime Cabinet Secretary Wycliffe Musalia Mudavadi.

The signing took place at Spelman College in Atlanta, where representatives of the U.S. and Kenyan governments were gathered to discuss investments in higher education, partnerships in STEM education in colleges and universities. 

At the signing, USAid also announced nearly $32 million (Sh4.19 billion) investment in Kenya’s education system.

This investment includes $850,000 (Sh110 million) in support of the Edtech Africa initiative, a public-private partnership program recommended by the President’s Advisory Council on African Diaspora Engagement (PAC-ADE) to promote STEM partnerships between Historically Black Colleges and Universities (HBCUs), the Open University of Kenya, Mastercard and Microsoft, and a $6.5 million (Sh845 million) new project in Kenya which aims to connect STEM graduates with jobs in fast-growing sectors like information and communication technology and manufacturing of textiles and pharmaceuticals. 

It also includes a new $24.5 million (Sh3.2 billion) programme on early grade literacy, to ensure that more Kenyans are prepared with the foundational skills they need to succeed in higher education.

Ruto also visited the New Vivo Fashion Group Retail Store in Atlanta where he lauded the business's move to include Made in Kenya brands in its stores. 

“This is an African spirit where businesses find innovative ways to support each other’s advancement as we take the global stage,” he said.

The President spoke at the Spelman College where a partnership on education was signed to enhance student and faculty exchange, joint research and innovation to accelerate our country’s Silicon Savannah ambition.

At the Centre for Disease Control Headquarters, President Ruto witnessed the signing of MoUs between CDC and Kenya Medical Research Institute, the Ministry of Health and the US President's Emergency Plan for AIDS Relief in developing a Sustainability Roadmap for Kenya’s HIV Programme and the joint proclamation for the operationalisation of the Kenya National Public Health Institute.

He noted that the U.S. has been a key ally in Kenya’s healthcare sector and intends to further this partnership by expanding infrastructure, research, and local vaccine manufacturing.

The President also interacted with Kenyans living in the United States of America at the Cobb Galleria Centre, held talks with the Mayor of Atlanta Andre Dickens and toured the Tyler Perry Studios.