Kenya’s government met with the International Finance Corporation (IFC) on Wednesday to discuss potential Public-Private Partnerships (PPP) for financing megaprojects such as the Malaba Expressway.
A high-profile delegation led by Treasury Cabinet Secretary John Mbadi and Principal Secretary Chris Kiptoo met with senior IFC officials in Washington to discuss potential areas of collaboration.
While welcoming IFC’s advisory support, CS Mbadi emphasized that PPPs have the potential to help Kenya achieve its development goals through innovative financing of key infrastructure projects.
He also emphasized the importance of sensitizing the public on the PPP model so that Kenyans understand how the country can realize untapped opportunities.
The Treasury Secretary also emphasized the government’s goal of using PPPs to offload the burden of major infrastructure projects from the government’s balance sheet, reducing reliance on loans and exchequer financing.
PS Kiptoo also expressed a strong interest in asset monetization, citing the proposed Expressway from Nairobi to Malaba on the Kenya-Uganda border as a prime opportunity.
“The Malaba Expressway could significantly enhance trade and regional connectivity. Through a PPP arrangement, we can fast-track its construction and management without burdening the exchequer,” PS Kiptoo stated.
The PS emphasized the importance of conducting thorough risk assessments in PPP projects to ensure that they do not place undue strain on public finances.
“PPPs should be reserved for high-priority projects where the benefits clearly outweigh the risks,” he added.
The IFC officials, for their part, identified several areas for potential collaboration, including asset monetization, legal reforms, and strengthening the regulatory framework for PPP projects.
The IFC maintained that asset monetization enables the government to generate revenue from public assets without relinquishing ownership, reducing fiscal pressures.
They also emphasized the importance of legal reforms to foster an investor-friendly environment, as well as a strong regulatory framework to ensure transparency and efficiency in public-private partnerships.
Both leaders reaffirmed the government’s commitment to pursuing innovative financing models that promote development while not increasing public debt.
IFC Advisory Services in Public-Private Partnerships helps governments structure and implement PPP transactions while encouraging private sector participation.
This comes as plans for the 256-kilometre Kenya-Uganda Expressway are in place, following the East African Community’s (EAC) announcement in April of plans to conduct a feasibility study over the next 18 months before construction begins.
The project, which will stretch from Kisumu to Kakira in Uganda, is expected to strengthen trade ties among EAC member states.
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