EA tap­ping into donor funds to roll out vi­tal mega pro­jects

Roads, rail­ways, en­ergy and water sec­tors have re­ceived fund­ing

The East African - - BUSINESS - By AL­LAN OLINGO The Eastafrican

East Africa has emerged as a big ben­e­fi­ciary of donor­funded de­vel­op­ment pro­jects on the con­ti­nent.

In the past three years, the World Bank and the African De­vel­op­ment Bank (AFDB) have funded key pro­jects in avi­a­tion, roads, rail­ways, en­ergy and water sec­tors.

The AFDB re­cently an­nounced that it had spent about $6.2 bil­lion in its 50-year his­tory on roads in the re­gion. This has seen more than 7,500 kilo­me­tres of roads paved. Kenya has re­ceived $1.78 bil­lion which saw 1,720km of roads paved; Tan­za­nia has re­ceived $1.58 bil­lion and paved 2,230km of roads, while Uganda re­ceived $870 mil­lion, paving at least 930km. Ethiopia re­ceived $1.38 bil­lion, with more than 2,320km of road paved while Rwanda’s 13 pro­jects cov­er­ing 300km, re­ceived $580 mil­lion.

“Th­ese roads have helped to open up re­mote ar­eas and re­leased their agri­cul­tural and eco­nomic po­ten­tial. Other roads have en­hanced re­gional con­nec­tiv­ity, link­ing cap­i­tals to ma­jor ports and fa­cil­i­tat­ing trade,” AFDB East Africa re­gional hub di­rec­tor gen­eral, Gabriel Ne­gatu said.

The World Bank has spent more than $4 bil­lion, fi­nanc­ing port ex- pan­sions, road net­works, avi­a­tion and water in­fra­struc­ture.

In March, while on a visit to Dar es salaam, World Bank Group Pres­i­dent Jim Yong Kim an­nounced that Tan­za­nia would ac­cess up to $2.4 bil­lion in con­ces­sional fi­nanc­ing for in­fra­struc­ture pro­jects. The funds are part of some $45 bil­lion the Bank plans to in­vest in Africa in the next three years.

“In­vest­ing in in­fra­struc­ture has a sig­nif­i­cant mul­ti­plier ef­fect, spurring growth in sub­se­quent years,” said Mr Kim. “We see tremen­dous op­por­tu­ni­ties in de­vel­op­ing coun­tries for pri­vate sec­tor in­vest­ment in ar­eas like in­fra­struc­ture, which is cru­cial for jobs and growth.”

In the past three months the bank has pumped more than $1.04 bil­lion into Tan­za­nia’s roads and port pro­jects. In July, it an­nounced a $345 mil­lion loan for Tan­za­nia to build a roll on/ roll off (ro-ro) ter­mi­nal as well as deepen seven ex­ist­ing berths in or­der to ac­com­mo­date larger con­tainer ships at its Dar es Salaam port.

“The project rep­re­sents the start of an in­cre­men­tal process to­wards ex­pand­ing the ca­pac­ity of the port of Dar es Salaam and strength­en­ing its eco­nomic role in the re­gion,” said World Bank’s lead trans­port econ­o­mist Richard Martin Humphreys.

In­vest­ing in in­fra­struc­ture has a sig­nif­i­cant mul­ti­plier ef­fect, spurring growth in sub­se­quent years.” Jim Yong Kim, World Bank Group Pres­i­dent

The Euro­pean Union, China and Ja­pan have also an­nounced new fund­ing for sev­eral pro­jects. For ex­am­ple, the con­struc­tion of a 30km road stretch be­tween Mom­basa and Mari­akani on Kenya’s Coast will be funded by the EU ($22 mil­lion), Ger­man de­vel­op­ment bank KFW loan ($55.2 mil­lion), the Euro­pean In­vest­ment Bank ($55.2 mil­lion) and the Kenyan gov­ern­ment ($19.8 mil­lion).

The planned Ki­tale-mor­pus stretch, which is ex­pected to link Tan­za­nia and South Su­dan through Kenya will be con­structed through a $27.5 mil­lion grant from the Eu-in­fra­struc­ture Trust Fund (ITF), $99.3 mil­lion loan from KFW and $24.8 mil­lion from the Kenyan gov­ern­ment.

In the avi­a­tion sec­tor, AFDB has sup­ported in­vest­ments in some 30 air­ports across the con­ti­nent, with Kenya and Ethiopia be­ing the key ben­e­fi­cia­ries in the re­gion.

Kenya’s Jomo Keny­atta In­ter­na­tional Air­port re­ceived $3.7 mil­lion fund­ing for the de­sign of the planned new run­way. The bank is also an­gling to fund the $368 mil­lion once the project has been ap­proved by the Kenyan gov­ern­ment. The World Bank, in Jan­uary this year an­nounced a $285 mil­lion loan to Nairobi for the de­sign of the new ter­mi­nals and also an up­grade of the se­cu­rity sys­tems within the coun­try’s main air­ports.

Ethiopian Air­line has also re­ceived $159 mil­lion from AFDB to partly fi­nance its ex­pan­sion plan and fleet mod­erni­sa­tion pro­gramme. Ad­dis Ababa’s Bole In­ter­na­tional Air­port also got a new run­way and tech­nol­ogy for the safety and re­li­a­bil­ity of air traf­fic fi­nanced by the Bank.

The rail trans­port has been touted as the game-changer for the re­gion’s eco­nomic ac­tiv­ity. Kenya and Uganda have been the big­gest ben­e­fi­cia­ries es­pe­cially from the two in­sti­tu­tions in their now de­funct pro­jects, Rift Val­ley Rail­ways.

AFDB com­mit­ted more than $40 mil­lion for the rail net­work that runs from Mom­basa Port in Kenya to the Ugan­dan cap­i­tal in Kam­pala, with a branch to Pakwach in north­east­ern Uganda. In Tan­za­nia, the World Bank has pro­vided $200 mil­lion for the re­ha­bil­i­ta­tion of the cen­tral rail­way.

“We are ex­cited to sup­port the Gov­ern­ment’s ef­forts to re­build its rail and in­ter­modal trans­port sys­tem. The project will also in­di­rectly help to boost agri­cul­tural trade, job cre­ation and over­all liveli­hoods for the coun­try and its neigh­bour,” said World Bank’s coun­try di­rec­tor for Tan­za­nia Philippe Dongier.

As en­try points for in­ter­na­tional trade, marine ports are im­por­tant el­e­ments for the eco­nomic com­pet­i­tive­ness of the re­gional coun­tries, and Tan­za­nia and Kenya have been the big­gest ben­e­fi­cia­ries from the two in­sti­tu­tions.

“We have also fi­nanced the mod­erni­sa­tion of some of th­ese ports which will go a long way to im­prove the ac­cess to the sea and link land­locked coun­tries such as Uganda, Ethiopia and Rwanda to mar­kets,” said Mr Ne­gatu.

Pic­ture: File

A road un­der con­struc­tion in Ny­eri town, cen­tral Kenya.

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