Kenya turns to private sector to bridge infrastructure financing gap

The Kenyan government will rely on local and foreign investors to help bridge a yawning infrastructure financing gap, senior officials said Tuesday.

Cabinet secretary in the National Treasury, Henry Rotich, said a strategic engagement with the private sector will help the government bridge an infrastructure financing shortfall estimated at two billion U.S. dollars.

"The government requires huge capital outlay to hasten modernization of infrastructure. We therefore require active participation of the private sector to generate new financing towards key infrastructure projects like roads, ports and railways," said Rotich.

He was speaking during a national conference on public-private partnership (PPP) to finance expansion and rehabilitation of major transport networks in the capital Nairobi.

Kenya has been developing a public-private financing model to modernize transport infrastructure and accelerate industrial growth.

Rotich said the enactment of friendly policies and regulations had facilitated private sector investments in transport infrastructure, energy, telecoms and water supply.

"As the second most favorite investment destination in this continent after South Africa, Kenya has witnessed a surge in the number of institutional investors willing to venture in road construction and power projects," Rotich told policymakers and investors.

He revealed the government will mobilize additional resources from the domestic market to implement mega infrastructure projects.

The official said pension funds and capital markets could be harnessed to finance four major road projects.

Cabinet Secretary for Transport and Infrastructure, James Macharia, said institutional investors from China, Europe and the United States are keen on channeling funds towards transport infrastructure in Kenya. Endit