Miga vice-president and chief operating officer Vijay Iyer said the agency hopes to ride on the project to diversify away from current concentration in energy sector and to break the three-year drought that has characterised its work with the private sector in Kenya.
The insurance facility is to shield the winning contractors from non-commercial risks and improve their access to funding for the project.
Miga wants to offer guarantees to financial services firms that will be supporting private investors in the project.
Multilateral Investment Guarantee Agency (Miga), the World Bank’s insurance arm, is looking to guarantee companies that are angling for the Sh55 billion contract to build the Nairobi-Nakuru Highway, top officials said.
Miga vice-president and chief operating officer Vijay Iyer said the agency hopes to ride on the project to diversify away from current concentration in energy sector and to break the three-year drought that has characterised its work with the private sector in Kenya.
“We are looking at Nairobi-Nakuru Highway that National Treasury has put up for bidders. I understand they will be announcing the successful bidder very soon,” said Mr Iyer.
The insurance facility is to shield the winning contractors from non-commercial risks and improve their access to funding for the project.
“That is one project that is big and very transformational at it will strengthen Kenya’s logistical backbone. We are hoping that we will have a role to play in its success,” Mr Iyer said.
In November 2016, the National Treasury published the project memorandum for the 273 kilometre Nairobi-Nakuru-Mau Summit segment of the highway as it invited private inves Summit segment of the highway as it invited private investors to bid for funding of the project that is to be built through public-private partnership (PPP).
The Nairobi and Mau Summit section of the highway is part of the Northern Corridor road that connects the Port of Mombasa via Nairobi to the border with Uganda at Malaba and onwards to Kampala.
The Treasury has estimated that the average number of vehicles plying the Nairobi-Mau Summit segment of the corridor per day is 16,000, and that the traffic peaks in Nakuru where traffic could rise up to 40,000 vehicles.
“The road is listed among the most dangerous in the world having killed 575 people between 2012 and 2014,” the Treasury said.
Miga wants to offer guarantees to financial services firms that will be supporting private investors in the project.
“The risk of breach of contract is very relevant in Kenya because of increased attention to PPP projects,” Mr Iyer said.
The World Bank uses Miga to insure risks such as expropriation, business interruption due to civil or political disturbance as well as breach of contract with investors operating outside their home countries.
Last week, Mr Iyer was in Nairobi where he met ministry of transport, housing, and energy officials, as well as representatives of banks and renewable energy companies.
He said Miga has been getting inquiries from a number of its clients who are keen to invest in Kenya and hopes that some partnerships will be realised “soon”.
Miga has been involved in about eight projects in Kenya, mostly in energy sector.
“We see a lot of opportunities here in supporting government in some PPP projects by bringing in quality private investors and finding ways in which the projects can be structured to ensure resources that are coming in are well prices and carry a much longer tenure,” he said.
Out of Miga’s total portfolio exposure of $22 billion (Sh2.2 trillion) globally, Africa accounts for about $5 billion (Sh500 billion) or 23 per cent.
Mr Iyer wants to grow that to 33 per cent in the next three years.
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