President William Ruto's administration has unveiled plans to revamp and expand two ports on the coast through a Public-Private Partnership (PPP).
The ports which are set to be rehabilitated in Lamu and Mombasa counties are part of the government's broader strategy to rebut the rising competition from harbours in neighbouring countries.
In the notice issued by the National Treasury, the government would expand the ports through a private partnership since the Kenya Ports Authority (KPA) is too financially constrained to fund the projects.
The government is also seeking private funding to reduce the overreliance on external debt, as the country already faces a high risk of debt distress.
According to Bloomberg, Kenya is pushing to complete the two key development projects through PPP, just like its East African peers, including Tanzania, which recently contacted the Adani Group to expand and modernise its port.
To raise the funds, Kenya will issue infrastructure bonds targeting long-term financing from the likes of pension funds and insurance firms to bankroll the renovation of the ports.
According to the National Treasury, the expansion of the two ports in Mombasa and Lamu is likely to take at least three years to reach financial closure.
The expansion would include revamping the container terminal at Mombasa and dredging the seabed to accommodate larger vessels. Once completed, the ports would be under a private operator.
It is worth noting that Mombasa hosts East Africa's biggest harbour, which serves several landlocked countries, including Uganda, Rwanda, South Sudan and the Democratic Republic of Congo (DRC).
However, in 2021, the government launched a port in Lamu to serve other landlocked countries located north of Kenya, including Ethiopia and South Sudan.
The latest announcement comes barely four months after KPA Managing Director, Captain William Ruto, said the Authority was working to boost the Mombasa Port’s capacity by expanding Container Terminal 1.
Speaking on November 27, 2024, Ruto revealed that the port had already exceeded its annual target, attributing the overperformance to improved operational efficiency and streamlined processes at the facility.
Ruto applauded KPA’s growth, saying such levels have not been reached before. He added that over the last two years, cargo volumes have increased so significantly that they will soon surpass the port’s current capacity of 2.1 million containers.
