Kenya has invited international development lenders to finance a $2 billion expansion of its main airport in Nairobi nine months after it cancelled a deal with India’s Adani Group after its founder was indicted in the United States.
The East African nation, which is seeking new ways to finance infrastructure projects due to sharply rising debt, will also issue a securitised bond for 175 billion shillings ($1.36 billion) locally and abroad next month for road construction, Transport Minister Davis Chirchir told reporters on Monday.
Chirchir said the government had “written” to development agencies “to basically tell them there’s an opportunity to build the airport through the Jomo Kenyatta International Airport, borrowing on its balance sheet.”
The Japan International Cooperation Agency, China Exim, KFW, the European Investment Bank and the African Development Bank had been contacted, Chirchir said.
The airport expansion includes a second runway at the airport and a new terminal building. Chirchir said once the funds were secured, the government would then look for a contractor to carry out the work.
“Instead of bringing concessioning to build the airport, we build the airport that we can concession later,” he said, referring to the difference with the previous plan which would have seen Adani carry out the expansion and then handed a 30-year lease to operate the airport.
That plan was scrapped last year when U.S. authorities indicted Gautam Adani and several executives, alleging they paid bribes to secure Indian power contracts and misled U.S. investors.
The Adani Group has rejected the allegations as “baseless” and said it was cooperating with legal processes.
On the bond issue for road construction, Chirchir said the government would securitise a portion of the fuel levy it charges motorists, adding the bond would be split into two halves for both a local and an offshore listing.
It was too early to say in which foreign market the bond would be sold, Chirchir said.
