AfDB to lend Sh17.5bn for Nakuru-Nairobi road as 10 financiers line up

Economy

AfDB to lend Sh17.5bn for Nakuru-Nairobi road as 10 financiers line up


Nnenna Nwabufo Director-General for East Africa at African Development Bank (AfDB). PHOTO | POOL

The African Development Bank (AfDB) will lend Sh17.5 billion towards the construction of the Nairobi-Nakuru highway, making it one of the ten financiers lining up to fund the project.

The funding represents about 10 percent of the Sh180 billion required for the upgrade of the project.

The loan will be given to a consortium led by French infrastructure firm Vinci, which secured a 30-year concession contract in 2019 to build and operate the Nairobi-Nakuru highway.

The remaining cost of the project under the public-private partnership (PPP) model will be financed by the other 10 development financiers and institutions.

AfDB director-general for East Africa Nnenna Nwabufo told the Business Daily the lender would meet its board in July to seek approval for the Sh17.5 billion loan for the toll road project.

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“We are finalizing our funding plans for our board to consider. We are looking at $ 150 million, ”she said.

The signing of contracts and subsequent funding will pave the way for the start of the 233-km road project, which will see the highway expanded to a four-lane dual carriageway, raising hopes of reducing traffic congestion on the Northern Corridor.

The International Finance Corporation also joined the scramble to fund the Sh180 billion Nairobi-Mau Summit Highway, giving the French contractor a major boost in raising funds for the road.

“We are working with the project promoters and 10 other development financiers,” Ms Nwabufo added.

She said AfDB’s part-funding is informed by the risks of the project, which she noted, other financial backers also share.

The Kenya National Highways Authority picked the Rift Valley Connect consortium, comprising Vinci Highways SAS, Meridian Infrastructure Africa Fund and Vinci Concessions SAS as the preferred bidder for the project.

The toll highway from Nairobi to Mau Summit was expected to begin in September 2021, Transport Cabinet secretary James Macharia had said earlier.

Participation of the AfDB and the ten other backers in the French-backed project signals the French firm building the road has cast its net wider in sourcing funds for the project.

The French consortium is expected to design, finance, construct, operate and maintain the expressway.

The firm will then recoup its finances using the revenues and income generated by the electronic toll collection system along the road for 30 years.

The project will also involve widening the existing Rironi- Mai Mahiu – Naivasha road to become a seven-meter carriageway with two-meter shoulders on both sides, construction of a four-kilometer elevated highway through Nakuru town, and building and improvement of interchanges along the highway.

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The French firm building the road has cast its net wider in sourcing funds for the project. The French consortium is expected to design, finance, construct, operate and maintain the expressway.

The firm will then recoup its finances using the revenues and income generated by the electronic toll collection system along the road over a period of 30 years.

The project will also involve widening of the existing Rironi- Mai Mahiu – Naivasha road to becoming a seven-meter carriageway with two-meter shoulders on both sides, construction of a four-kilometer elevated highway through Nakuru town, and building and improvement of interchanges along the highway.

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