Kenya-Infrastructure-Economy

Kenya’s ambitious infrastructure plans require private sector participation- report

APA-Nairobi(Kenya)

Private sector investment is likely to play an increasing role in helping Kenya meet its annual $4.0 billion infrastructure spending needs, Moody's Investors Service has said in a new report on Wednesday.

Underpinning this anticipated influx in investment are recent improvements in Kenya's business climate, the country's favorable growth outlook and its deep financial sector.

However, persistent issues around corruption and transparency, together with evolving regulatory frameworks, will remain a concern for potential investors.

"Electricity generation and transmission, rail and road networks and water access and irrigation will likely be the main beneficiaries of private sector investment, as these are key areas of focus for Kenya's government,” said Christopher Bredholt, a Vice President – Senior Credit Officer.

Kenya has already improved access to electricity to around 75percent in 2018 from 36percent in 2014, the highest in East Africa.

The East African nation is now aiming to increase household access to safe drinking water to 80 percent in 2022 from 60 percent currently and is targeting 10,000 km of new roads to ease urban congestion and facilitate trade.

According to the rating agency, greater investment in the sector from Kenya's $10 billion of pension fund assets and $6 billion managed by insurance companies would help fill the infrastructure spending gap (estimated at $24 billion through 2030), but significant foreign capital will still be required.

Developments in Kenya's green bonds framework and risk mitigation from multilateral development banks will also encourage investment, Moody’s noted.


JK/as/APA

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