Kenya gets Sh25b for roads upgrade

April 23, 2011 12:00 am

, NAIROBI, Kenya, Apr 23 – The World Bank on Friday approved Sh25.1 billion for the reconstruction of 221 kilometers worth of roads aimed at improving the transport sector in Kenya.

The project is further aimed at reducing traffic snarl ups on the Tanzania-Kenya-Sudan road corridor so as to strengthen regional integration and support growth of key economic sectors.

World Bank Director for Kenya Johannes Zutt said the money would be used to rehabilitate the Kisumu-Kakamega-Webuye-Kitale roads, some sections of the Northern Corridor in the Coast Province as well as the Mombasa International Airport.

“The Bank is making this substantial investment in Kenya’s two most important road corridors as part of its effort to help Kenya transform into a modern middle-income economy,” he said.

“This project will reduce bottlenecks on transit traffic and trade, particularly in the western region, opening up trade and investment opportunities for Kenya and the wider East African region,” he added.

The Bank, together with the Kenyan government and other partners are investing Sh40 billion into the project with a major focus on the Tanzania-Kenya-Sudan Corridor, which also has links to Uganda and Ethiopia. It is the second largest transport system after the Northern Corridor which takes up an additional Sh38.5 billion.

The two corridors serve about 70 percent of Kenya’s 38 million people and link businesses that contribute an estimated 80 percent of the country’s Gross Domestic Product.

World Bank Sector Manager for Transport Supee Teravaninthorn noted that the new projects would also increase aviation safety and security at Kenya’s airports and further improve the institutional arrangements and capacity of the transport sector.

“The project will support the implementation of Vision 2030 and help consolidate Kenya’s position as a regional transportation hub,” Ms Teravaninthorn said.

Other partners in the transport sector investment program include the French Development Agency (AFD) and the European Investment Bank (EIB).

The financing is provided on standard terms of the International Development Association (IDA)—the World Banks’ concessionary lending arm—which include a 40-year maturity with a 10-year grace period.

Meanwhile Kenya has also signed 10 bilateral agreements with China that are aimed at strengthening relations between the two countries as well as enhancing Kenya’s capacities in various fields.

Among the deals signed was a Sh7.9 billion framework agreement for the construction of a 500 bed capacity hospital that will be the country’s fully fledged university health facility.

Through a statement sent to newsrooms President Mwai Kibaki noted that projects to develop solar and hydropower energy as well as the provision of anti-malaria equipment were also included.

“It is imperative that we remain steadfast in our resolve for comprehensive reforms. It also important that reforms are channelled through the process mandated by all states,” he said.

With the creation of the new southern Sudan state, Kenya has acquired strategic significance for China which imports 60 percent of the country’s oil.

Li Changchun, senior Chinese official of the Communist Party, said Kenya is the biggest beneficiary of Chinese aid and loans with 22 construction companies currently undertaking 52 separate projects in the country.

"Today Kenya is the largest beneficiary of Chinese aid and concessional loans. We intend to deepen the relations further," he said.

Southern Sudan\’s oil and the inauguration of a new state, slated for July, could lead to the creation of a new pipeline which does not go through the north but instead cross Kenya to reach the sea.

With few natural resources to attract China\’s voracious energy industry, Kenya is nevertheless considered an important access market and a regional cornerstone.

Kenyan-Chinese trade stood at around Sh109 billion in 2009 with Kenyan exports to China almost negligeable.

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