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EA tapping into donor funds to roll out vital mega projects

Thursday September 21 2017
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The AfDB recently announced that it had spent about $6.2 billion in its 50-year history on roads in the region. FOTOSEARCH

By ALLAN OLINGO

East Africa has emerged as a big beneficiary of donor-funded 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.

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

READ: Sense of urgency as EA region upgrades its roads, airports

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.

READ: Dar’s $154m port plan to up rivalry with Mombasa

“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.

New funding

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.

Rail transport

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.

ALSO READ: Kenya, Tanzania in tight race for region transport hub status

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