Economy
Kenya is offering 100 dams to private investors in the Sh1.7 trillion project
Friday, May 19, 2023
Cabinet Secretary for Water, Sanitation and Irrigation Alice Wahom addresses the PPP 100 Dam Initiative with investors in Sarova Panafric, Nairobi on May 18, 2023. Image | Ponce Bogeta | NMG
Kenya has offered private investors the chance to invest in 100 dams and unveiled a range of land incentives as it seeks Sh1.7 trillion to address the challenges of water scarcity in the country.
Addressing investors at a pre-bid meeting, Cabinet Secretary for Water Alice Wahomi said some of the dams are on public land, including forest areas, and will not be sold to them to ensure the project retains its status as a national endeavour.
The government plans to partner with private investors by offering the land, as some of the dam sites are on government land, mainly in forests. It is important to note that the government will not sell the land as the land and the entire project will remain under the authority of the national government,” Ms Wahome said.
She said water scarcity was a pressing issue, especially in semi-urban, rural and marginalized areas, adding that by adopting public-private partnership (PPP) initiatives, the ministry intends to ensure that sustainable and reliable water services are available to all. citizen.
It added, however, that with an investor on board, it would operate as a joint venture during construction and repayment periods to ensure the investor’s return on investment.
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Once the project is completed, the national government will take responsibility for it. The government will implement this initiative through the water works development agencies, which will cover all nine regions of the country as a matter of priority.”
The 100 Dams PPP initiative seeks private capital and technology through a design-build-finance-operate-maintain-transfer model.
The program aims to provide potable water to an additional six million households, bring one million hectares to irrigation and generate 554 megawatts of hydroelectric power.
The Ministry of Water and Sanitation recognizes the urgency of this challenge and recognizes that collaboration with the private sector is critical to addressing it effectively. And through partnerships between the public and private sectors, the ministry can benefit from the expertise, resources and innovations of the private sector to improve water infrastructure and service delivery.
Investors have long shied away from the water sector due to low returns despite it being capital intensive.
President William Ruto said in September that private companies would be allowed to invest in water and sell to the national government in a deal similar to that with electricity producers, as the government moves to attract new capital to plug a funding shortfall.
He said his government would turn to the private sector to increase access to clean water along with other capital-intensive projects he could not afford right away.
Under the proposed arrangement, private companies will build dams and drill water to sell to state-owned water agencies, which will provide it to homes and other public entities at a lower cost.
Water purchase deals with the private sector would help the government pursue capital-intensive water projects without relying on loans while the country moves to relieve debts that have slashed funds available for development expenditures.
Public-private partnerships will encourage the adoption of innovative technologies and sustainable water management practices, including the implementation of efficient irrigation systems, and rainwater harvesting and conservation.
By incorporating sustainable technology and methods, the ministry aims to improve water use, reduce waste and ensure long-term water security for the nation.
The public-private partnership will prioritize the provision of affordable and equitable water services to disadvantaged areas. By adopting innovative financing models and improving operational efficiency, the ministry aims to ensure accessible and affordable water services to all Kenyan citizens, regardless of their socioeconomic background.”
She said the amendments to the Water Law provide for the establishment of public-private partnerships in dam construction, bulk water sales, groundwater status, and asset transfer.
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“Our goal is three million feddans. We have a total area of about 670,000 feddans, which is not enough to provide us with the food security that our country needs. The goal of the public-private partnership program is to provide water for six million families, twice the current number,” the minister said.
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