ADB approves Sh18b funding to upgrade, maintain key highway

Nairobi Nakuru highway under construction at Rironi area. [George Njunge, Standard]

Plans to upgrade the 178-kilometre Nairobi-Nakuru-Mau-Summit highway to a four-lane carriageway have received a major boost after the African Development Bank approved funding of close to Sh18 billion.

The construction, financed under the government’s First Mover Public-Private Partnership (PPP) programme, is expected to take three years to complete.

According to the bank's bulletin released on July 17, 2022, to newsrooms, the existing highway will be transformed into a four-lane carriageway and the 57.8km two-lane A8 South, from Rironi to Naivasha, will be strengthened and maintained over a period of 30 years.

The project will see the development of the A8 and A8 South highways. Both roads are major routes stretching across the most densely populated parts of the country.

The road begins in Nairobi, passes through the commercial nerve centre, and traverses Nakuru and Kiambu counties. It also runs through agricultural zones, wildlife reserves, and tourism centres.

The roads also form part of the strategic “Northern Corridor”, the busiest trade and transport corridor in East Africa, providing access to Kenya’s landlocked neighbours.

The Sh17,739,794,850 ($150 million) is from the bank's non-sovereign operation lending window, forming part of a DFI tranche to Rift Valley Highways Limited – a Special Purpose Vehicle incorporated in Kenya and wholly owned by VINCI group and Meridiam Infrastructure Africa Fund.

In September 2020, Rift Valley Highways entered into a PPP concession agreement with the Kenya National Highways Authority (KeNHA) to design, build, finance, operate, maintain and transfer the two highways over a period of 30 years.

The project aligns with Kenya’s Vision 2030 and national strategy to support industrialization through infrastructure development.

It also aligns with the bank's priorities for infrastructure in its Ten-Year Strategy (2013–2022) and three of its five priorities: integrate Africa, industrialize Africa, and improve the quality of life for the people of Africa.

The project is the first PPP project to be approved by the board under the bank’s recently established PPP Framework, according to the bank.

The bank's acting Senior Director for the Infrastructure and Urban Development Department, Mike Salawou said: “Tolling and concessions of major trade corridors across the African continent is on the rise as the need for connectivity and integration is amplified by the AfCFTA and the need for alternative financing sources through PPPs, to ensure the sustainability and reliability of trade corridors."

Nnenna Nwabufo, the bank's Director General for the East Africa Region said: “One major plus is that this project will improve the extremely poor safety record of the highway which has been identified as one of the most accident-prone in Kenya."

Nwabufo added: “In addition, direct development outcomes expected from the project include increased productivity, commercial efficiencies, and time and cost savings. Ultimately, this should support economic growth and increase the quality of life of the people."

The project is expected to generate 1,500 jobs during construction and 200 during its operation and has at least 40 per cent local content in the form of labour and locally-sourced materials.

“This project will make the corridor vibrant, travel time reduced, operational costs reduced and connectivity between Nairobi and Nakuru enhanced,” said an official in the Ministry of Transport who did not wish to be named because he is not authorised to speak to the media.