Infrastructure

Kenya Takes Lion’s Share of Sh5.8tn Projects in East Africa

The region had 61 mega infrastructure projects valued at Sh5.8 trillion in 2015.

Updated on

March 22, 2016

Workers on the Mombasa-Nairobi standard gauge railway, February 11, 2016. PHOTO | FILE

Kenya had the lion’s share of the Sh5.8 trillion projects that were recorded in East Africa last year on the back of mega shopping mall projects and the standard gauge railway says a new report by financial consultancy Deloitte.

The Africa Construction Trends Report 2015, which was released last month, noted that the region had a total of 61 mega infrastructure projects valued at Sh5.8 trillion in 2015, which is a slight fall from Sh6.2 trillion in 2014.

According to the report, Kenya had 20 ongoing large projects followed by Ethiopia at 12, with basic infrastructure projects, energy, and transport maintaining their top position on the Kenyan development agenda.

Transport took the lion’s share of Kenya’s mega projects, on account of the Mombasa to Nairobi standard gauge railway that is currently underway, while energy took the second position at 30 per cent.

The survey looked at reported infrastructure deals worth at least Sh5 billion that were physically under construction, with construction crews on-site, by June 1, 2015.

It found that the standard gauge railway, shopping malls, and commercial office developments were the main areas with large construction works going on.

“There have also been some changes in the retail estate sector where countries such as Kenya and Tanzania are experiencing significant growth in retail, entertainment and lifestyle facilities, modern office parks, and hotel space,” the report said.

This, according to Deloitte, can be attributed to expansion in cities and a growing middle class, high yields in retail property rentals, technology innovation and sustainability with a drive toward green and open spaces, growth of ‘new urbanism’, increased Foreign Direct Investment, and a shortage of quality property.

Some of the biggest projects underway in East Africa include Tanzania’s Bagamoyo port (Sh11.12trn), Grand Ethiopian Renaissance Dam (Sh480bn), Djibouti 470km electric railway (Sh408bn), and the Mombasa-Nairobi standard gauge railway line (Sh387.6bn) in Kenya.

Others are Uganda’s Karuma Power Station (Sh224bn), Ethiopia’s Potash railway line (Sh153bn), Kenya’s Eastern electricity highway project (Sh122.4bn), Tanzania’s Songo Songo gas and electricity project (Sh122.4bn) and Kenya’s Lamu port berths (Sh102bn).