President Uhuru Kenyatta’s visit to Beijing, China, for the 2018 China-Africa summit secured loans and grants for Kenya through public private partnership (PPP) deals worth billions of shillings.
Kenya is expected to receive more than Sh230billion in loans and grants to execute President Kenyatta’s Big Four agenda.
The head of state was in Beijing to attend the China-Africa Forum for Cooperation (FOCAC) 2018 Summit. On the sidelines of the summit, Uhuru held bilateral talks with his host, President Xi Jinping, which yielded a number of goodies for Kenya.
In a clear departure from the past when Kenya secured loans through government-to-government partnership, this time, Uhuru took a different approach by wooing public private investment with Chinese firms.
“The new partnerships will fast track result of Kenya’s desire to shift away from pure debt financing with new emphasis being placed on PPPs and the need to explore innovative off balance sheet financing for the country’s infrastructure needs,” the president said.
Under such arrangements, Chinese private companies under the Kenya government’s roads annuity programme will construct two major highways in North Eastern.
The Modogashe-Habaswein-Samatar and Elwak-Rhamu roads will cost Sh15 billion. Other projects lined up include a 30-kilometre expressway running from Jomo Kenyatta International Airport (JKIA) across the city to Westlands and the development of Dongo Kundu Industrial Special Economic Zone in Mombasa.
There are plans for the second and third phases of the Dongo-Kundu bypass at a cost of Sh30 billion to connect the north and south coast.
The phases involve an 8.9km road between Mwache junction and Mteza and another 6.9km Mteza-Kibundani road, linking the highway with the Likoni-Lunga Lunga Road. The first phase of the project, 10-kilometre stretch, cost Sh11 billion. “Chinese private investors want to put their money in several critical infrastructural projects. We witnessed the signing of an agreement for the construction of the Western Bypass to complete the road network to ease the city’s perennial traffic problems,” the president said.
Kenyatta and Xi his also witnessed the signing of an agreement on Economic and Investment Cooperation, under which Kenya will receive a grant of Sh4.5 billion to guide the discussion and implementation of projects that involve both nations.
The leaders discussed the construction of Phase 2B of the Standard Gauge Railway covering Naivasha to Kisumu, which will cost Sh380 billion.
Uhuru said the priorities identified in the next FOCAC cycle are aligned with the government’s Big Four Agenda on manufacturing, food security and nutrition, universal health care and affordable housing.
“Each of these sectors offers viable investment opportunities. I therefore welcome Chinese companies to invest in any of these priority areas,” he said.
In recent years, China has grown to become a major player in world politics and diplomacy, thanks to its growing economic influence especially in Africa where it continues to invest billions of dollars in infrastructure.
Under its Belt and Road Initiative, the Asian nation is seeking to control global trade by enhancing inter-continental connectivity through roads, bridges, ports and seaways.
Kenya is at the core of BRI and is one of the foremost beneficiaries of the ambitious plan through the financing and construction of the SGR.
“My government appreciates your government’s commitment to develop, jointly with our Railway Training Institute, the appropriate vocational and technical skills to ensure optimal management of the rail network on a sustainable basis,” Uhuru told Xi during the summit.