China, Kenya Sign Infrastructure Accords During Beijing Meeting

NAIROBI (Capital Markets in Africa) – Chinese companies will construct three main roads in Kenya through public-private partnerships under the East African nation government’s roads-annuity program.

The unidentified companies will build a 30-kilometer (18-mile) expressway from the nation’s biggest airport in the capital, Nairobi, to the city’s Westlands suburb, Kenyan President Uhuru Kenyatta’s office said Tuesday in an emailed statement. Other projects include two roads in the north-eastern Kenya that will cost 15 billion shillings ($149 million) and development of the Dongo Kundu special-economic zone in the port city of Mombasa.

The public-private partnerships are part of the Kenyan government’s plan to shift from pure debt financing for the country’s infrastructure needs amid concern that national debt is rising too quickly after reaching 5 trillion shillings in June. Public debt could balloon to 60 percent of gross domestic product this fiscal year, according to BMI Research, from 57 percent in 2017-18.

During bilateral talks, Kenyatta and Chinese President Xi Jinping discussed financing to extend a new railway past Naivasha town to the western city of Kisumu, according to the statement. Kenyatta asked China for half of the $3.8 billion required for the 270-kilometer (168-mile) project as a grant, the Nairobi-based Daily Nation newspaper reported on Wednesday, citing an unidentified Kenyan government official.

China will give Kenya a 4.5 billion-shilling grant to guide the implementation of projects and fund construction of the so-called Western bypass in Nairobi. They also signed a cooperation agreement under the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative, while the University of Nairobi, Kenya Railways Corp. and Beijing Jiaotong University agreed on training railway engineers and managers, according to the statement.

Source: Bloomberg Business News