A new multipurpose dam to be built in Kitui and Tharaka Nithi counties will cost Sh425 billion following a deal by President William Ruto and UK Prime Minister Rishi Sunak on Monday.
The building of the dam, which will be Kenya’s second expensive infrastructure project after the standard gauge railway, is part of six projects worth Sh500 billion to be fast-tracked under a new UK pact signed on the sidelines of the climate conference COP27 underway in Egypt. Initially, the dam was estimated to cost about Sh220 billion ($2 billion).
The green investment programmes — in energy, agriculture and transport — will become flagship projects of the UK-Kenya Strategic Partnership, which is an ambitious five-year deal signed to unlock mutual benefits between the two countries.
Among the six are a new geothermal project in Menengai, a solar energy project in Malindi, the Nairobi Railway City regeneration project, a credit guarantee scheme and the multipurpose dam. The dam is a public-private partnership on the Tana River and is planned to generate 1,000 megawatts of hydroelectric energy and provide irrigation for 400,000 hectares of farmland.
“Led by UK engineering firm GBM, the project is envisaged to include both a Power Purchase Agreement for clean energy and a Water Purchase Agreement for agricultural irrigation,” the UK government said in a statement.
The Malindi Solar Expansion — a 40-megawatt solar plant, whose first phase will cost Sh7.5 billion will be built by UK company Globeleq with finance from British International Investment.
The deal will also see a Sh2.5 billion investment in Menengai Geothermal, a 35MW geothermal project by Geothermal Development Company (GDC) and UK’s Globeleq which will mark the full development of a field discovered by GDC. The project has already secured a Power Purchase Agreement with Kenya Power.
The deal will also fast-track the Nairobi Railway City with a Sh5 billion investment which includes the regeneration of central Nairobi, anchored on a new central rail station connected to Bus Rapid Transit. The project has been developed with technical assistance from the UK government.
UK architects (Atkins) won the deal to design the new station. The other project is dubbed United Green, a Sh31 billion investment that will set up a climate-smart crop and agro-industrial processing system via a joint venture with Kisumu County to create 2,000 direct jobs and provide an income for a further 20,000 farmers in the Lake Victoria region.
The pact also comes with guarantees where the UK will collaborate with CPF Financial Services and other private investors, including Cardano Development, to launch a new guarantee company that will de-risk investments and unlock private finance from pension funds and insurance companies for projects in Kenya.