State agency gets approval to borrow Sh8b for JKIA upgrade

By John Oyuke

Loan security: MPs approved State’s move to act as guarantor to a loan from the European Investment Bank

Kenya Airports Authority (KAA) can now secure about Sh8 billion (5 million Euros) loan from the European Investment Bank (EIB) for expansion of Jomo Kenyatta International Airport (JKIA).

This follows approval by Parliament to allow Government to Guarantee the KAA loan last week. Finance Minister, Njeru Githae said KAA had successfully negotiated the loan from the EIB for the expansion of JKIA to increase passenger capacity from 2.5 million to 9.3 million.

Fund projects

EIB requires that the host country must guarantee any investment it undertakes in each country.

The authority, which has embarked on rehabilitation and construction of additional passenger terminals and car park, is expected also to increase the total project financing by about 30 per cent.

Githae told the House before it wound up last week that KAA must also raise Sh4.5 billion in overall expansion of JKIA. “I wish to confirm to this House that as Treasury, we have looked at their cash flow, commitments, past performance and we have no doubt that they will be able to repay this loan on their own,” he said.  While supporting the motion, assistant minister, Ministry of State for Defence (Rtd) Maj-Gen Joseph Nkaissery described the on-going rehabilitation and expansion of JKIA as expanding the economy. “This will enable us enhance exports and imports. Therefore, this is an important move by KAA and guaranteed by the Government for this loan, so that this area of the economy can be expanded,” he said.

Nkaissery said the country would be efficient in tourism, trade, movement of goods and, especially horticultural products. “By expanding this airport, our farmers will be enabled to export their produce,” he added.

JKIA is the country’s largest aviation facility is the busiest airport in East Africa and the sixth busiest airport in Africa. It attracts major airlines due to its strategic location in the fast growing economies of the region.

The on-going infrastructure development at the Airport is a one-way approach to upgrade the facility and increase its capacity to unlock the country’s suppressed growth and stimulate other economic sectors.

With the magnificent expansion of terminals and runways, JKIA is expected to be an integral component in enabling Kenya to take the advantage of its geographical location to the realisation of Vision 2030.

Githae said the approval clears way for the third phase of JKIA expansion that entails rehabilitation of terminals one, two and three, and the construction of a new building to be completed by December 2014.

Speaking in Nairobi late last year, Kenya’s Airport Authority Managing Director Stephen Gichuki said construction of JKIA’s second runway, expected to decongest operations would begin in the course of this year.

Total cost

 “It is part of a series of upgrades estimated to cost Sh85.2 billion intended to boost its capacity to handle passengers and cargo traffic, besides modernising and improving available facilities,” said Gichuki.

The 5500-metres runway whose design started in August year will be equipped with advanced technology, making it possible for planes to land even in bad weather, which has seen flights in the past diverted from Nairobi to Mombasa.

The need for second runway was amplified when Air Egypt veered off the single runaway mid last year, resulting in closure of the airport and diversion of flights to Entebbe, Dar es Salaam and Mombasa. Other upgrades involve construction of a Terminal Four, renovation of the existing units and construction of remote stands.

State agency gets approval to borrow Sh8b for JKIA upgrade

By John Oyuke

Loan security: MPs approved State’s move to act as guarantor to a loan from the European Investment Bank

Kenya Airports Authority (KAA) can now secure about Sh8 billion (5 million Euros) loan from the European Investment Bank (EIB) for expansion of Jomo Kenyatta International Airport (JKIA).

This follows approval by Parliament to allow Government to Guarantee the KAA loan last week. Finance Minister, Njeru Githae said KAA had successfully negotiated the loan from the EIB for the expansion of JKIA to increase passenger capacity from 2.5 million to 9.3 million.

Fund projects

EIB requires that the host country must guarantee any investment it undertakes in each country.

The authority, which has embarked on rehabilitation and construction of additional passenger terminals and car park, is expected also to increase the total project financing by about 30 per cent.

Githae told the House before it wound up last week that KAA must also raise Sh4.5 billion in overall expansion of JKIA. “I wish to confirm to this House that as Treasury, we have looked at their cash flow, commitments, past performance and we have no doubt that they will be able to repay this loan on their own,” he said.  While supporting the motion, assistant minister, Ministry of State for Defence (Rtd) Maj-Gen Joseph Nkaissery described the on-going rehabilitation and expansion of JKIA as expanding the economy. “This will enable us enhance exports and imports. Therefore, this is an important move by KAA and guaranteed by the Government for this loan, so that this area of the economy can be expanded,” he said.

Nkaissery said the country would be efficient in tourism, trade, movement of goods and, especially horticultural products. “By expanding this airport, our farmers will be enabled to export their produce,” he added.

JKIA is the country’s largest aviation facility is the busiest airport in East Africa and the sixth busiest airport in Africa. It attracts major airlines due to its strategic location in the fast growing economies of the region.

The on-going infrastructure development at the Airport is a one-way approach to upgrade the facility and increase its capacity to unlock the country’s suppressed growth and stimulate other economic sectors.

With the magnificent expansion of terminals and runways, JKIA is expected to be an integral component in enabling Kenya to take the advantage of its geographical location to the realisation of Vision 2030.

Githae said the approval clears way for the third phase of JKIA expansion that entails rehabilitation of terminals one, two and three, and the construction of a new building to be completed by December 2014.

Speaking in Nairobi late last year, Kenya’s Airport Authority Managing Director Stephen Gichuki said construction of JKIA’s second runway, expected to decongest operations would begin in the course of this year.

Total cost

 “It is part of a series of upgrades estimated to cost Sh85.2 billion intended to boost its capacity to handle passengers and cargo traffic, besides modernising and improving available facilities,” said Gichuki.

The 5500-metres runway whose design started in August year will be equipped with advanced technology, making it possible for planes to land even in bad weather, which has seen flights in the past diverted from Nairobi to Mombasa.

The need for second runway was amplified when Air Egypt veered off the single runaway mid last year, resulting in closure of the airport and diversion of flights to Entebbe, Dar es Salaam and Mombasa. Other upgrades involve construction of a Terminal Four, renovation of the existing units and construction of remote stands.