Key Projects of Kenya
Rift Valley Railways
In 2004, the governments of Kenya and Uganda agreed to jointly let concessions in their respective railways to rehabilitate, operate and maintain both networks into one railway system. Uganda, as a landlocked country, relies on the Kenyan port of Mombasa for sea access, a route facilitated by the Rift Valley Railways (RVR) public–private partnership. RVR represents a private consortium in which the Sheltam Railway Company of South Africa holds the biggest stake. The shareholding agreement was revised in 2010, with the four new respective owners promising $250 million in investment to revitalise the network.
Public–private partnerships in the renewable energy sector are widespread in Kenya, which was the first African country to build a geothermal energy site. Geothermal development is an active sector due to the abundance of Kenya’s geothermal resources in the Rift Valley (currently 198 MW, with a potential of 7,000–10,000 MW), the relatively green low emissions of the mode, independence from climate variation and the highest availability rate at more than 95 per cent. Independent Power Projects was launched in the energy sector in 1996 to meet Kenya’s growing demand for energy. The Geothermal Development Company was established as a public agency to facilitate geothermal development by absorbing the risks of geothermal development and extending public–private participation. The first operational geothermal site was in Olkaria I (1981) operated by public body Kenya Electricity Generating Company (KenGen), which today operates a rate of 45 MW. A third-phase Independent Power Project at Olkaria III produces at 12 MW. Twenty sites in the region have been allocated for further development, with KenGen and IPP’s combined production anticipated to rise to 576 MW in the next 20 years.
The government has adopted a strong public-private policy to address the estimated infrastructural funding gap of US$2-3 billion required annually over the next ten years. The Public Private Partnership Act No.15 became active in February 2013. Prior to that, a number of PPP projects had successfully gone ahead in the country without a dedicated legal and regulatory policy framework, including the 90 MW Rabai Independent Power Project (2006); Mobile Telephone licensing of Safaricom and Celtel (1999) and Econet (2004); the concession of Kenya Railways Corporations freight and passenger services (2006); and the Nairobi Urban Toll Road Project, approved 2009. Since the late 1990s, Kenya’s key sectors for private investment have emerged as telecommunications, energy, transport, water and sewage.
Energy currently accounts for the highest total infrastructure investment followed by ports, roads, water and sanitation, railways and airports. Development via private partnerships is a fundamental tool of Kenya’s super-structural plan ‘Vision 2030’ (2008-30), to convert the country into a newly industrialised middle-income nation with a high quality of life for all citizens by 2030.