This archive report was first published on 26 September 2019.
Kenya has made significant investments in infrastructure projects, particularly in transport and energy, which position the country to play a key role in the African energy market.
However, land acquisition issues have cast a shadow on the actualization of these projects.
The Land Control Act requires parties to obtain consent for the sale, transfer, lease, or subdivision of agricultural land, which is a common requirement for energy infrastructure projects.
Given the land-intensive nature of these projects, most sites are located in rural areas, making the land agricultural.
The Land Control Boards are responsible for ascertaining that certain conditions are met, including refusing consent where the application is by a non-citizen or a private company with non-citizen shareholders.
Despite the exemption provided by the Land Act for presidentially exempted projects, many developers have been forced to create project companies or convert them to public companies to circumvent the consent requirement.
The Energy Act, 2019 requires national and county governments to facilitate land acquisition for energy infrastructure development.
One suggestion is to exempt infrastructure projects from the Land Control Act provisions, which would ease the setup of projects in Kenya.
Non-Kenyans are restricted from holding freehold land titles, and can only hold leasehold interests for a maximum of 99 years.
While this restriction is common on the continent, countries like South Africa and Egypt allow foreigners to own land on freehold titles.
The silver lining in Kenya's context is that the maximum leasehold duration is longer than the expected life of energy projects.
Community engagement is also a critical issue, with inadequate or inconsistent consultation potentially fatal to a project.
Project developers must consult with communities to ascertain legitimate land rights, assess the impact of the project, and establish conditions for a productive relationship.
Finally, developers must consider easements and other analogous land rights for transmission and distribution networks.
Kenya's decentralized and manual land registry system has made it challenging to verify title documents, and conflicting judicial interpretations of property rights have made investing in land a risky business.
Digitization of the land registry is a welcome move in the fight against fake title deeds.
While Kenya's land acquisition challenges are not unique, the situation is exacerbated by the prevalence of small parcels of land, which are either privately-owned or community land.
Conversely, neighboring Tanzania has a more streamlined land ownership system, where all land is vested in the government, and foreign companies can obtain a right of occupancy with a Certificate of Incentives.
Uganda has a similar land ownership structure, but the Uganda Investment Authority has a one-stop shop for investors, including an embedded land registry function.
Kenya can borrow aspects from its neighbors to reduce land acquisition difficulties faced by investors in the energy sector.
