African Development Bank Sh8.5b dam boosts Kenya's Konza dream

An artist’s impression of Konza City.

By JEVANS NYABIAGE

The African Development Bank has given a Sh8.5 billion boost to Kenya’s technology journey.

The money will fund the first phase of the Thwake dam that will supply water to the proposed Konza Technology City in Machakos County. It will also power industries in the area. The project will provide sewerage facilities for Konza, and Wote, Kathonzweni, Makindu, Kibwezi and Mtito Andei towns by 2015.

Gabriel Negatu, the AfDB regional director of the East African Resource Centre, said the financing agreements for the $100 million (Sh8.5 billion) Thwake dam, whose construction begins next year, have already been finalised.

The proposed dam will cover an area of approximately 7,166 acres, and span Makueni, Kitui and Mbooni districts.

Construction

“We will be floating the tender for the construction in the next few months,” Negatu said on Thursday during the launch of Silicon Kenya, a report on Kenya’s ICT sector.

AfDB will provide additional funds to pipe the water to the city and buy turbines for generating 20MW of power in the second phase  of the project.

Phases three and four of the project will involve development of irrigation canals, offtake facilities from the dam and rural water supply sanitation facilities.

AfDB has said it will compensate those losing land and support alternative livelihoods for them over an agreed duration.

It is anticipated that Konza City will be part of the Special Economic Zones that will replace the Export Processing Zones and hopefully create more than 200,000 jobs.

The project is being implemented under a public-private partnership model, where the government will provide land and build other infrastructure, such as roads, railway lines, water, telecoms and sewerage systems.

Kenya has also offered several tax incentives for investors putting up at Konza. Top on the list is exemptions on income, dividends or any payments made to non-residents for the first 10 years.

ICT Cabinet Secretary Fred Matiang’i said the construction of the dam would boost the project’s attractiveness to investors.

“The first phase of the project will kick off before Christmas and the construction of Thwake dam is expected to lift the project’s profile,” he said.

AfDB, however, warned that there are still several hurdles in Konza City’s way.

“To sustain its position as one of Africa’s top ICT hubs — because of, for example, being a terminus for four undersea fibre-optic cables — Kenya needs to address the many challenges it faces,” the report notes. 

Besides ICT infrastructure itself, the cost and reliability of electricity must be addressed, and transport infrastructure improved.

“The government must also improve the business environment through pragmatic laws, regulations, and policies to attract more ICT investment and promote commercialisation of innovations able to compete in the global market.”

Konza is expected to create 80,000 jobs in the first four years, with more than 250 investors lined up, including IT innovation centres, banks, real estate firms, hotels, local hospitals, and local and international universities.

Ready investors

Investors prepared to start immediately include Safaricom, Wananchi Online, Craft Silicon, University of Nairobi, Jomo Kenyatta University of Agriculture and Technology, and the Nairobi Hospital.

Foreign multinationals include the fast-growing Chinese Huawei Technologies, Korean electronics giant Samsung, Telemac of the US and Google.

The Sh606 billion ($7 billion) city is Kenya’s single most ambitious and biggest development project. It involves the building of an entire technopolis from the ground up.

Konza will be built on 5,000 acres of what is now ranchland. 

The Vision 2030 project is designed to promote Kenya’s ICT industry by attracting innovators, entrepreneurs and multinationals looking for low-cost, high-quality outsourcing. 

HR&A Advisors — a New York-based real estate consulting firm — has been contracted as the master developer.

According to Matiang’i, the government has set aside Sh1.3 billion this financial year to fund the project’s first phase, which will include construction of roads within the site.

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