East Africa plans united front in search of Sh2trn Lapsset funding

Four East African countries may join forces as they seek American private sector funding for a Sh2 trillion ($24.5 billion) infrastructure project to link Lamu to the oil fields of Uganda, South Sudan and Ethiopia.

Following a meeting in Nairobi on Thursday, the Heads of State from Kenya, Uganda, Ethiopia and South Sudan, said “a joint approach” to the Lamu Port South Sudan Ethiopia Transport corridor (Lapsset) was essential for the quick implementation of the project.

UPCOMING SUMMIT
“Our discussion was especially informed by the upcoming Africa-USA Summit on August 4-7, 2014 that will allow leaders a chance to engage with American investors on this project.
This being a continuation of similar engagements that are being held with investors from across the Middle East and the Indian Ocean Rim,” they said in a statement.

The US-Africa leaders’ summit will bring together African presidents and American business leaders in a forum expected to boost trade and investment between the two regions.

This comes as the United States seeks to flex its economic muscles in Africa in the face of increased activity from China.

The Nairobi meeting was attended by Uganda’s President Yoweri Museveni, Ethiopian Prime Minister Hailemariam Delasegn and South Sudan President Salva Kiir.

EMULATE MODEL

In seeking funding for the Lapsset project, the countries may emulate the African Development Bank’s Africa50 Infrastructure Fund model.

This is a special purpose vehicle that is expected to mobilise private sector resources for investments in major infrastructure projects on the continent on a commercial basis.

The Lapsset project will include a new railway line, an oil pipeline, an airport in Isiolo and a port in Lamu as well as resort cities.

The ground-breaking for the project took place in March 2012.

Speaking to the Nation yesterday, Lapsset Corridor Development Authority chief executive Silvester Kasuku said work on the Sh269.7 billion ($3.1 billion) Lamu project was progressing well.
“There is a lot of progress. So many projects are on-going,” Mr Kasuku said.

The Kenya Government has already made overtures to the private sector to fund the projects.

In April, a proposal to hand over those worth Sh215 billion was offered to various government ministries for evaluation.

Development of Lamu port was last year designated as one of 47 priority public private partnership (PPP) projects by the PPP-Unit within the National Treasury.

During the meeting, the leaders also explored the possibility of shortening the period between project conceptualisation and realisation of a sustainable financial model that will ease implementation.