Lamu development projects will take off despite terror attacks

Kenya: The Lamu Port project will take off despite recent attacks at Mpeketoni and its environs and previous incidences of insecurity that have hit the coastal region of Kenya.

Pundits point out that although all the incidents happened within the relative close proximity of the Lamu Port South Sudan, Ethiopia Transport (LAPSSET) corridor route and general area, the resolve of unfazed ‘battle hardened’ consortium of international investors will ensure they will go ahead with the $3.29 billion (Sh280 billion) region’s dream project regardless of perceived increased risks and insurance costs, thanks to their unwavering commitment to the region’s  flagship high profile joint undertaking in Eastern Africa.

Experts on international investment aver that the attendant risks will, whet further the appetite of the major players, some of who like, Britain’s Tullow Oil, have operated and continue to operate in far riskier troubled spots and windy swept desolate corners of in the wide world to date.

Boost

The Lamu port got a shot in the arm, as it were, when President Uhuru Kenyatta recently directed Treasury to fast-track assistance to a consortium of high profile investors among them US development agency USAid to start work on the multi-billion venture.

This brought into the loop such firms as General Electric, Spanish Energy conglomerate Iberdrola, Norwegian gas company Hoegh LNG as well as AKL Wind Energy, transport solutions provider Indra Systems and independent power provider Aeolus Kenya.

The investors, too, plan to raise money from US agency Overseas Private Investment Corporation (Opic), the Export-Import Bank of the US.

At the same time, the USD 10billion resort city styled on the World Famous Dubai free port will is on course, a move that will place Lamu Island on the world map.

 The consortium has an interest in building three world class state-of-the-art berths, an 850 Megawatt gas fired ultra modern power plant, the Lamu International Airport that will transform the hitherto sleepy town into a jet-set bustling metropolis in the league of the likes of Dubai Free Port and others, including the Lamu to Isiolo highway, a water desalination plant to quench the thirst of water deficit northern Kenya.

 To raise the much needed funds, the consortium of firms are planning to rope in United  States Agency for International Development (USAid), from down south South African lender Standard Bank not leaving behind US private equity firm America Capital & Infrastructure Corporation.

Investors have indicated their willingness to raise $25.5 billion for a 32-berth port venture that will include ultra-modern highways and other infrastructure in line with Kenya’s 2030 blue print.

Through private, public partnership (PPP), the consortium will be facilitated by the Uhuru administration to partner with the state and other regional states in high profile investments set to transform the region immensely in line with the 2030 blue print. Energy needs will be met for instance by the 850 Mega Watt gas fired power plant one of its kind in the entire region and one that will have the capacity for offshore storage and re-gasification to boot.

Despite the threats of apparently worsening insecurity in the coast region, Britain's Tullow Oil is determined to pipe the oil it has discovered in Kenya's northeastern Turkana and Uganda to the coast. The pipeline will cross northern Kenya, a region prone to violence and attacks in the recent past due to its close proximity to Somalia.

Here attacks between rival groups over land and other disputes are common and it has been pointed out that a cheaper above-ground pipeline could be a sitting duck target by disgruntled and belligerent groups intent on making political capital holding investors to ransom by attacking the pipeline. Tullow, which works with Africa Oil in Kenya, hence plans to bury the piping, citing both environmental and security considerations. The actual pipeline route and other details are yet to be confirmed as studies are ongoing.

Oil exports from Kenya and Uganda, where France's Total and China's CNOOC also operate, could be channeled through the mega pipeline in about three years, some pundits in the know point out. The joint Kenya-Uganda pipeline that could cost $2.5 billion to $5 billion.

At the moment South Sudan, exports oil via a pipeline through Sudan but it could be brought into the loop as the project kicks off.

Kenya's scenic palm-fringed coastline and the locals’ legendary resilience will ensure that they will pick up the pieces and like the phoenix rise from the ashes as they say no to intimidation and international terrorism.

For a while the visitors may have dropped especially to Mombasa, 240 km (150 miles) south and to Mpeketoni town 30 km (20 miles) from Lamu, but the locals and investors’ resolve will ensure that the area will bounce back. The 65 victims who died in the attack are martyrs and locals with support from well wishers from the whole country have resolved to soldier on in their honour. Don’t forget that the country’s hard worn independence came after a bitter struggle.