17 November 2012

Kenya: World Bank Gives Sh3.4 Billion to Boost Private-Public Deals

THE World Bank has approved a Sh3.4 billion ($40 million) loan to Kenya to support public-private sector partnerships.

The amount was announced yesterday for the Infrastructure Finance Public-Private Partnership Project aimed to support Kenya to improve its enabling environment and generate bankable public-private partnership projects in transport and energy sectors.

It will also deal with other areas that are critical to the transformation of the country from low to middle income status, the World Bank said in a statement.

The project will focus on financing the transaction preparation, institutional support and regulatory reforms necessary to develop a bankable project pipeline that the government can take to market for private sector financing.

The new initiative, through the recently approved Public-Private Partnership Policy, will increase private participation in Kenya's infrastructure market across sectors to support national economic growth and employment creation, the statement added.

"Kenya faces a significant infrastructure financing deficit estimated at Sh178.5 billion ($2.1 billion) annually, and this imposes a serious constraint to growth and doing business in Kenya," said Johannes Zutt, World Bank country director for Kenya is the statement. "Our analysis shows that Kenya's per capita growth rate can be increased by three percentage points if infrastructure financing is increased to the average of a middle income country."

While the country spends about Sh136 billion ($1.6 billion) a year on infrastructure, the World Bank projects that the it requires a sustained expenditure of Sh340 billion ($4 billion) a year, or about 20 per cent of its GDP, over the next decade.

"The challenge is to strengthen government capacity to prepare and procure viable projects, provide the legal, regulatory and fiscal environment that gives private investment the confidence to take longer term debt and equity exposure in infrastructure investment," the bank notes.

Copyright © 2012 The Star. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.