Usahihi Expressway Limited—the developer of the proposed Nairobi-Mombasa Expressway—says it expects to complete the feasibility study of the project in May, moving closer to the start of works on the public-private venture.
A feasibility study describes an assessment of the practicality of a project or system and uncovers the strengths and weaknesses of a proposed initiative, including aspects such as environmental issues and the relocation of persons.
Usahihi, backed by US-based Everstrong Capital, is expected thereafter to request final approval from the Treasury and potentially break ground on the project in early 2026.
“We are finishing the feasibility study in May, and we will ask the National Treasury PPP unit for their final approval and then we expect to get to financial close by the end of the year with an eye on starting construction next year,” said Usahihi Expressway Limited Chairman Kyle McCarter.
The company signed an agreement in February, kick-starting the fundraising of Sh129.3 billion ($1 billion) from local banks and pension funds, a key step in the development of the Usahihi Expressway, a 440-kilometre toll highway seeking to cut travel times between Nairobi and Mombasa to 4.5 hours from upwards of eight hours.
CPF Capital and Advisory was picked to offer transaction advisory and placement services and is expected to mobilise the Sh129.3 billion ($1 billion) portion of funding for the project from the domestic market by the end of this year.
Everstrong Capital is meanwhile expected to raise the balance of Sh323.4 billion ($2.5 billion) from the external market closing the financing gap to the project’s sticker cost of Sh452.8 billion ($3.5 billion).
The US firm is also providing Sh12.9 billion ($100 million) for land acquisition along the route, which will allow some landowners the opportunity to swap their property for equity in the road with a promise of a 17.5 percent return.
The developer has expressed confidence in raising a portion of project funds from the domestic market equating the opportunity available for local pension funds to Treasury instruments and guaranteed funds.
“There is about $1 billion in interest. This has been an asset class not made available to pension funds. For the first time, they are going to have a 30-year asset that they can invest in, and which matches the pensioners’ needs for a sustainable return,” said Mr McCarter.
The US firm will operate the road for 30 years before returning it to the government and is banking on trucks that form the majority of the vehicles using the Nairobi-Mombasa route to generate an estimated 75 percent of revenues from the toll road.
