Bridging infrastructure gaps in Kenya: how PIDG is forging new partnerships to drive private sector investment in infrastructure

On 27 July 2021, the UK Government welcomed Kenyan President, Uhuru Kenyatta, to the Mansion House for the announcement of a £132 million package of investments in Kenya. The investments, which include the development of an International Financial Centre in Nairobi, will support efforts to build green affordable homes, boost manufacturing, and finance clean energy solutions.

Emilio Cattaneo, Head of Technical Assistance at PIDG, who was in attendance reflects on the event and highlights how PIDG is contributing to this initiative by supporting the promotion of Public Private Partnerships in key infrastructure sectors and driving socio-economic development and capacity-building in Kenya.

It was an honour to represent PIDG at the event and witness the strengthening of partnerships between the UK and Kenya, particularly with regards to the mobilisation of private investment for infrastructure. PIDG has delivered several infrastructure projects in Kenya, and we are thrilled to be able to continue this work through a closer association with Kenya’s Public Partnership Unit (PPP Unit), providing technical and financial support to create new and investable projects which will mobilise significant private sector capital.  We were very pleased that the President acknowledged in his speech the imminent signing of a memorandum of understanding with the PPP Unit, to fund early-stage project development, thereby supporting the PPP Unit’s preparation of a pipeline of market ready projects:

“I am equally glad to announce our intention to deepen cooperation between the Foreign Commonwealth Development Office (FCDO), and the Government of Kenya, expressed through a Memorandum of Understanding to be formalized between the National Treasury and Planning and the Private Infrastructure Development Group (PIDG). The cooperation with FCDO is for a possible funding, through PIDG, of 1.3 million US dollars to support early and transaction-stage PPP project development activities in Kenya. This is further testimony to the lasting legacy of Kenya-UK relationships for our shared posterity”.

In addition to this funding provided through PIDG Technical Assistance (PIDG TA), further investments by InfraCo Africa were announced, specifically £3.3 million to finance the expansion of off-grid solar in Western Kenya, providing 6,000 homes with access to clean energy, and a further £0.9 million to Nopea Ride, the first e-mobility company in Africa, to accelerate access to clean transportation.

The Kenyan government has made PPPs a priority mechanism that can support the development of assets and provision of services to address the major infrastructure gaps in the country. PIDG TA will supplement an investment of USD1.0 million from FCDO with a grant of USD300,000, to be applied to a Technical Assistance Support Programme for the Kenyan PPP Unit. The programme will seek to provide general technical assistance grants to fund feasibility and market studies, and environmental and social impact assessments; and provide funding for embedded advisory services within the PPP Unit, across a range of sectors including roads, bridges and port infrastructure, student accommodation, energy, and water. One of the first projects the PIDG TA grant will support is the Nairobi Smart Street Light Project, a pilot project which entails the retrofitting and installation of new lighting fixtures with LED lamps, as well as the establishment of a Common Management System which will ensure that Nairobi County’s streetlights are managed in a cost-effective and energy-efficient way, creating safer places to live and work.

This partnership is an exciting opportunity for us at PIDG, and if successful, will enable PIDG TA to replicate a similar model in other markets in Sub-Saharan Africa, with other PPP Units that share the same interests of mobilising private sector investment through the preparation of market ready projects. We are very much looking forward to finalising the agreement and supporting the Kenyan government in delivering infrastructure projects and driving growth.