South African State-owned lender to fund Sh60bn Isiolo-Lamu road

Money Markets President Uhuru Kenyatta with his South African counterpart Jacob Zuma (left) at State House in Nairobi when the latter visited Kenya last October. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

By MATHIAS RINGA

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Summary

• Transport PS Irungu Nyakera said in Mombasa that detailed designs of the road had been completed.
• The road construction, he said, would take between three and four years to be completed.
• State House had announced last October during the State visit of South African President Jacob Zuma that a consortium of international investors led by the DBSA was ready to invest $1.9 billion (Sh196 billion) in the Lapsset project.

The Development Bank of Southern Africa (DBSA) is set to fund the construction of the Lamu-Garissa-Isiolo road at a cost of Sh60 billion, the Ministry of Transport has said.

The construction of the 580km road to bitumen standards is part of the Lamu Port South Sudan Ethiopia Transport (Lapsset) project.

Transport PS Irungu Nyakera said in Mombasa that detailed designs of the road had been completed.

“We are glad that the Development Bank of Southern Africa is going to finance the construction of the Lamu-Garissa-Isiolo road to the tune of Sh60 billion. Sh5 billion has already been earmarked for the initial stages of the road construction,” he said.

“The funding is already available, and we expect bush clearing to begin in May to pave the way for the major works.”

The road construction, he said, would take between three and four years to be completed.

State House had announced last October during the State visit of South African President Jacob Zuma that a consortium of international investors led by the DBSA was ready to invest $1.9 billion (Sh196 billion) in the Lapsset project.

According to a brief by State House spokesperson Manoah Esipisu on October 16, $1.2 billion (Sh124 billion) would go towards three additional berths at Lamu port and $700 million (Sh72.5 billion) to the Lamu-Garissa-Isiolo road under the annuity programme.

The DBSA is wholly owned by the Government of South Africa, and has arranged funding for projects in transport, energy, water and ICT sectors across Africa.

Mr Nyakera said the road is key to the Lapsset project since it would connect the proposed Lamu port to Addis Ababa in Ethiopia, boosting trade between the two countries.

“Ethiopia is building a railway line to connect to the country through Moyale, while on our part we are constructing the road from Lamu to Isiolo,” he said.

The Lamu corridor project, which was commissioned by former President Mwai Kibaki in 2012, is expected to open up Kenya’s northern frontier for more trade and investment, and has been identified as the long term conduit for Kenya’s oil exports through a crude pipeline linking Lamu to the oilfields in Turkana.

So far construction of the Lapsset headquarters, which cost Sh866 million, and a police station are complete.

READ: Grand Kenya port plan faces headwinds despite oil finds

Coal-powered plant

Mr Nyakera also said the government had set aside Sh10 billion for the construction of the Lamu-Witu-Garsen road to connect the Lamu port to Mombasa County.

He added that the construction of the 132km road would begin soon since the contractor is already on the site.

The PS said the government is also constructing a nine-kilometre road to connect the Sh200 billion coal powered plant in Kwasasi to the Lamu port.

The government has allocated Sh10 billion to the port project in the next financial year to finance the ongoing construction of the first three berths, with the works now 20 per cent complete.

The government has already paid Sh4.6 billion to the contractor while another Sh2.9 billion is to be paid before the end of this year.

“We expect the construction of the first berth of the Lamu port to be completed by June 2018, with the second and third coming through in 2019 and 2020 respectively,” said Mr Nyakera.