Grant Thornton Kenya, a global audit, tax and advisory firm commended the government model of Public Private Partnerships financing for projects, saying it will improve sound economic growth and thus enhance the country’s profile in the global map.
However, Parag Shah an advisory partner with the firm said the government needs to market the model to investors so that they can understand it well to enable them make critical decisions on the kind of investments to place.
Shah made the remarks during a forum hosted by his organization in conjunction with International Project Finance Association (IPFA) at a Nairobi hotel.
“Since independence Kenya has not been able to mobilise adequate funds to finance projects in the energy, road sub-sector, water among other sectors in the economy. Government therefore needs to work closely with private sector in order to assemble more resources to fund the outlined mega projects,” said Shah.
Due to low funding, Shah said the country has been grappling with high cost of doing business mainly escalating cost of energy. “Government resolve to partner with the private sector to fund the projects will assist to reduce high cost of energy, transport, water bills, and enhance communication,” he added.
The head of the PPP unit at National Treasury Stanley Kamau explained the new model have been identified as the net frontier for the country’s economic take off. During the forum attended by institutional investors, road contractors, bankers, the participants discussed financing of projects in infrastructure and energy sectors in East African Community (EAC).
“Some of these projects had taken a slow pace subjecting the country experience huge power deficits and challenges in transport. There has been slow pace by investors to take up the projects two years after the enforcement of the PPP Act,” Eng Kamau said.
Last year, the government convened an International Investment Conference that attracted more than 1000 investors. During the meeting the government presented a list of mega project under the PPP model to international investors.
Outlining the progress Kenya had made in energy and infrastructure sectors, Kamau agreed that PPPs have suffered slow takeoff due to a number of challenges including finance.
He advised that there is need to remodel the mega projects with a view to attracting more finance from the private sector. Since the PPP Act become effective in 2013, Kamau said Kenya has made very good progress in a number of projects especially in the energy and infrastructure sectors.
He identified the annuity programme of 10,000 kilometres road network as an example of a PPP that is expected to deliver excellent results.