This archive report was first published on 18 July 2019.
Kenya's infrastructure financing gap stands at an estimated Sh400 billion annually, with budgetary allocations unable to meet this need. As a result, many projects have to wait in line until funds are available.
According to Moody's, a credit rating agency, the country's capital markets could be tapped to fund these projects. The agency noted that Kenya has reasonably well-developed pensions and insurance industries, with assets of around $10 billion (Sh1 trillion) and $6 billion (Sh600 billion), respectively.
Moody's also highlighted the importance of increasing allocation to infrastructure, away from dominant cash and government securities, to support the sector's local currency financing needs. The agency cited the recently launched framework to guide the issuance of green bonds as a supportive measure, particularly in financing energy projects.
However, Kenya has yet to report significant success in Public-Private Partnership initiatives, with all identified projects still at initial stages. Challenges include procurement delays and the government's failure to get buy-in from Kenyans, especially when it comes to setting up road tolls.
Published on July 18, 2019.
