EIB Plans to Double Kenyan Loans This Year for Infrastructure

NAIROBI (Capital Markets in Africa) – The European Investment Bank may double its loans to Kenya this year to fund power plants, roads, and other infrastructure projects, the lender’s regional representative said.

Financing has been agreed in principle for deals worth about 375 million euros ($465 million), Catherine Collin, EIB regional representative for East Africa, said in an interview Wednesday in the capital, Nairobi. Last year, the lender signed commitments totaling 182 million euros, she said.

“Kenya remains a focal country in EIB’s East Africa portfolio, together with Ethiopia, with financing targeting essentially large infrastructure and the financial sector,” Collin said. “Kenya continues to offer good potential if political stability prevails and the business environment is favorable.”

Kenya is expected to invest $184 billion over the next two decades building infrastructure including power plants, railways, and roads, according to the Sydney-based Global Infrastructure Hub. Last year, it completed construction of a $3.8 billion railway linking the port of Mombasa to the capital, of Nairobi, and the Lake Turkana Wind Power Project, the country largest single private investment.

‘Pick Up’
Lending to the East African nation slowed last year because of political instability during the country’s presidential elections, Collins said. “This year will pick up,” she said.

Projects that the EIB may finance include:

• A power plant planned by Akiira Geothermal, which is backed by Nairobi-based Centum Investments Ltd. The company may receive 155 million euros once it’s found enough steam to generate 70 megawatts of power;
• Two solar projects in the western city of Eldoret, which stand to receive 60 million euros;
• 35 million euros for Kisumu Water & Sewerage Co. to expand, rehabilitate water and sanitation services; the French Development Agency will provide 20 million euros, while the European Union will also provide a grant of 5 million euros;
• EIB also plans to offer the Kenya Ports Authority a 100 million-euro loan, complemented by 30 million-euro EU grant, to rehabilitate berths 11-14 at the Mombasa port;
• Solar lighting firm d.light is set to receive 25 million euros to expand its pay-as-you-go off-grid solar products in East Africa;
• I&M Bank Ltd. will next week receive $20 million for onward lending to SMEs; the bank’s Tanzanian subsidiary will also get $20 million; I&M’s Rwandan unit received $10 million last year.