National Treasury Cabinet Secretary John Mbadi has announced government plans to raise Ksh70 billion through Public-Private Partnerships (PPPs) to finance four critical development projects.
According to Mbadi, PPPs are seen as a strategic solution to address the significant infrastructure development funding gap, particularly amid the constrained fiscal space, competing development priorities, and rising public expenditure demands under the national and devolved structures.
Kenya is estimated to require approximately Ksh260 billion ($2 billion) annually to bridge the infrastructure funding deficit.
“The government envisages mobilizing Ksh70 billion within the next FY 2025/26 through private investments in PPPs by working with the private sector to develop projects in priority areas,” Mbadi said in the Draft 2025 Budget Policy Statement.
Mbadi Unveils 4 Projects Requiring Ksh70 B
This ambitious plan includes financing four key projects across various sectors.
In the water sector, the Sabaki Water Carrier Project, with an estimated budget of Ksh28 billion, aims to enhance the country’s water supply infrastructure.
In the energy sector, the government is focusing on several generation and transmission projects, including the Nairobi Street Lighting Project, which is set to cost Ksh10 billion.
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The housing sector will see the development of the Stony Athi Affordable Housing Project, with an investment of Ksh9.2 billion, contributing to the ongoing efforts to address the housing deficit.
Meanwhile, in the roads and transport sector, the Mombasa-Nairobi Expressway, which is currently in the project development phase, will improve connectivity between the two cities.
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Mbadi stated that the government identified PPPs as one of the key avenues to partly fill the investment financing gap occasioned by the ongoing fiscal consolidation efforts, reduced government borrowing and lower yields on government securities.
He emphasized that PPP Projects also promote local financial service sector deepening through mobilized private sector capital, getting innovative ideas, risk transfers, non-debt fiscal sustainability and addressing climate related exposure.
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The CS mentioned that over Ksh140.7 billion in private capital has so far been mobilized through PPPs over the years up to 30th June 2024.
“During Financial Year 2024/2025, the National Treasury projects to mobilise a total of Ksh 50 billion from the following projects: 35MW Orpower Geothermal Project (Ksh 11 billion); Galana Kulalu Food Security Project Project (Ksh 12.5 billion) and Africa 50 transmission lines (Ksh 41 billion),” he added.
CS Mbadi mentioned that currently, there is a PPP projects portfolio pipeline of 37 at various stages.
During the last financial year, the PPP program achieved financial close of two main projects namely, Kenya Defence Forces housing Project and 35MW Quantum Geothermal Project.
At the same time, the CS said the National Treasury has a number of key policy milestones which include development of PPP Regulations under the PPP Act 2021, and development of a climate resilience framework for PPPs.
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