Kenya Annuity Roads Program - Lots 15 and 18 (MIGA-14505)

Countries
  • Kenya
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
A
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
May 5, 2020
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Mota-Engil Engenharia E Construcao Africa S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Infrastructure
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Guarantee
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 17.59 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 2,800.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Bank Documents
Primary Source

Original disclosure @ MIGA website

Updated in EWS Sep 6, 2022

Disclosed by Bank Aug 26, 2021


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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

On June 4, 2021, MIGA issued guarantees of up to US$17.59 million covering the equity investment by Mota-Engil Engenharia E Construcao Africa S.A. of Portugal in Infraconnect Fifteen Kenya Limited and Infraconnect Eighteen Kenya Limited, both incorporated in Kenya. On June 30, 2021, MIGA issued guarantees of up to US$74.44 million covering the equity investment by Mota-Engil Africa, SGPS, S.A. of Portugal in Infraconnect Fifteen Kenya Limited and Infraconnect Eighteen Kenya Limited. The guarantees will have a term of up to ten (10) years, providing coverage against the risks of Breach of Contract, Transfer Restriction, Expropriation, and War and Civil Disturbance. On June 30, 2021, MIGA also issued guarantees of up to US$119.61 million covering the non-shareholder loan by Stanbic Bank Kenya Limited of Kenya to Infraconnect Fifteen Kenya Limited and Infraconnect Eighteen Kenya Limited against the risks of Breach of Contract, Expropriation, and War and Civil Disturbance for up to ten (10) years.

The Project involves the financing, design, construction (rehabilitation and upgrade), maintenance, and transfer of roads in ten counties in Kenya of a total length of 44.9 kilometers in Lot 15 and 35.1 kilometers in Lot 18. Lot 15 is located in the central part of Kenya, while Lot 18 is located in the western part of the country.

The Project constitutes part of a national road annuity program comprising the upgrade of up to 10,000 kilometers of roads in Kenya in the next five (5) years, with total investment estimated at US$2.8 billion.

The Project is expected to derive the following economic benefits: (i) generate time travel savings and reduce vehicle operating costs, (ii) increase economic dynamism, particularly in the agriculture, commerce and tourism sector in the influence areas of the road, (iii) create employment opportunities directly and indirectly during the construction and operation phases, and (iv) improve access to key social infrastructure.

The Project is also expected to employ 230 people at Lot 15 and 190 at Lot 18, of which over 90% will be local hires, during construction phase. Given the high poverty rates and low per capita GDP in the affected counties, particularly Lot 18, the Project's economic impact may be amplified through indirect employment creation effects on vendors and residents near the roads. Additionally, given the rural and underdeveloped nature of the two locations, upon completion, this Project is expected to link the local population to critical social services, such as health facilities, schools, and business centers.

 

Investment Description
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Contact Information
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Not Disclosed

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