Kenya-US Partnership: A $3.6 Billion Highway Development and More

Kenya’s aspirations to enhance its national infrastructure and boost regional connectivity have taken a significant step forward with the signing of a $3.6 billion agreement between the Kenya National Highways Authority and US-based Everstrong Capital. This major project involves constructing a 440-kilometer expressway linking Nairobi, the nation’s capital, to the port city of Mombasa, marking one of the largest infrastructure endeavours in East Africa.

The expressway, named Usahihi — meaning “correctly” in Swahili — will span four to six lanes and pass through expansive wildlife reserves, providing a faster and more efficient route for goods and commuters between these critical economic hubs. This project not only aims to alleviate the heavy congestion currently plaguing the existing two-lane road and railway financed by Chinese lenders but also to foster economic growth in the surrounding regions.

This infrastructure deal was announced during President William Ruto’s landmark visit to the United States, the first state visit by a Sub-Saharan African leader since 2008. It highlights a pivotal moment in Kenyan-US relations, as both nations seek to deepen ties amidst growing global competition from other international players like China and Russia.

Also Read: Kenya’s President William Ruto State Visit to Washington

The project’s financing model is particularly noteworthy. Everstrong Capital plans to manage the entire lifecycle of the expressway — from financing and construction to operation and maintenance — under a 30-year concession without imposing financial risks on the Kenyan government. This approach aims to make the project self-sustaining and alleviate potential debt burdens for Kenya, which is currently categorised at high risk of debt distress.

Scheduled to reach financial close by the end of this year and to commence construction by March 2025, the Usahihi expressway represents a shift towards more sustainable and privately funded infrastructure projects. This is a strategic move by Kenya to manage its financial exposure while still pushing forward with vital development projects.

In addition to the highway, President Ruto’s visit to the US has been marked by other significant investment announcements. These include a $1 billion data center project spearheaded by Microsoft Corp. and G42 of the United Arab Emirates, and a $175 million investment in Coca-Cola Co.’s local operations. Moreover, the US International Development Finance Corp. is set to boost its investments in Kenya, enhancing its portfolio in the country to over $1 billion.

During his visit, President Ruto is also advocating for the renewal of the African Growth and Opportunity Act (AGOA), a key trade program that allows duty-free access to the US market for qualifying Sub-Saharan nations. With AGOA set to expire in 2025, its renewal is crucial for continuing to facilitate trade and economic growth between the US and Africa.

This series of developments underscores a burgeoning period of strategic partnerships and economic diplomacy between Kenya and the United States, promising to yield substantial benefits for regional development and international cooperation. As these projects unfold, they signify a hopeful era for enhanced infrastructural capabilities and economic resilience in East Africa.