A consortium of international investors led by the Development Bank of South Africa (DBSA) is ready to invest Sh193 billion ($1.9 billion) in the Lamu Port South Sudan Ethiopia transport corridor (Lapsset) project, State House has said.
In what could lift the fortunes of the mega infrastructure project whose progress has been slowed down by insufficient funding, the investors are interested in putting up three berths at the Lamu Port and financing the construction of the 537-kilometre Lamu-Garissa-Isiolo road.
State House spokesman Manoah Esipisu said Sunday that Kenya and South Africa signed an MoU on the Sh2.5 trillion project during the visit by President Jacob Zuma last week.
DBSA is wholly owned by the South African government, and has arranged funding for projects in transport, energy, water and ICT sectors.
“The Development Bank of Southern Africa is the main arranger for a consortium that wants to invest Sh122 billion ($1.2 billion) in three additional berths at Lamu Port. The same consortium would look to fund construction of the Lamu-Garissa-Isiolo road under the annuity programme at a cost of Sh71 billion ($700 million),” said Mr Esipisu in the weekly briefing held at Kisumu State Lodge.
The Lamu corridor project, which was commissioned by former President Mwai Kibaki in 2012, is expected to open up Kenya’s northern frontier for more trade and investment, and has been identified as the long term conduit for Kenya’s oil exports through a crude pipeline linking Lamu to the oilfields in Turkana County.
The Lamu Port at Manda Bay consists of 32 deep sea berths, with the first three already under construction with a target completion date of 2018.
So far, construction of the Lapsset headquarters, which cost Sh866 million, and a police station are complete, with Kenya keen to complete construction of the headquarters and the first three berths before opening up the project to private investors.
While the government has managed to raise international financing for other mega projects such as the standard gauge railway, the Lapsset project has not been as fortunate, especially after Uganda opted out of the joint pipeline deal and South Sudan fell back into strife.
The interest of the South Africa led investors is however likely to give the project a boost, coming just a few months after a group of rich countries and high net worth investors under the umbrella of the Organisation for Economic Cooperation and Development (OECD) identified the project as one of 16 in Africa that they would consider financing through a $20 billion fund.