VENTURES AFRICA  –  The World Bank has injected Sh11 billion ($130 million) as support for Kenyan joint ventures between the public and private sectors via its Infrastructure Finance and Public-Private Partnerships Project (IFPPP) initiative.

The initiative targets is focused on providing aid to the Kenyan government as it set out to increase strategic infrastructure and social service levels.

The loan will also provide guarantee mechanisms such that high priority projects may act as collateral for private enterprises involved to raise money from the financial markets.

Finance economic secretary Geoffrey Mwau said government will ensure that there are environmental and social safeguards before embarking or approving any PPP projects.

Dr Mwau made this remark during a conference on the partnerships at Inter-Continental Hotel in Nairobi last Thursday. He also indicated that the framework for the model will be set in motion by next month and implementation begins in September.

The Rift Valley Railways project is among initiatives jointly funded by government and the private sector with equity firms Citadel Capital and TransCentury holding 51 and 34 per cent shares, respectively. The Kenya and Uganda governments hold the rest.

According to Dr Mwau, among the ventures that would be supported under the arrangement are those involving civil works or repairs of infrastructure and, in some cases, land acquisition.

The Treasury has engaged two consultants to help develop two frameworks referred to as Environmental and Social Safeguards and Resettlement Action Plan. Addressing the same conference, PPP director at the Treasury Stanley Kamau said that consultants were finalising a report on priority projects envisaged under the World Bank financing.

Mr Kamau indicated that priority projects include building a commuter railway line in Nairobi, and the possibility of similar ones in Mombasa and Kisumu.

He also listed the construction of ports, with the target being Kisumu, since Lake Victoria was critical under the East African Community framework, as a priority although he indicated that the government may not have the capacity to operate and maintain Thika Road, but it could contract its maintenance for 10 years. The same principle could apply to the by-passes, he added.

The construction and operation of a hostel for Kenyatta University for between 5,000 and 6,000 students is also among the projects earmarked for trial on a PPP basis.

The strategy requires the private sector to put up buildings and operate the hostels. Then, after a while, they would revert to the university.

Mr Kamau opined that “for the projects to have such returns, the government has to inject some cash”.  The involvement of the private sector may also be encouraged by provision of government guarantees as risk-mitigation; otherwise such projects would never take off, he added.

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