Unlocking Local Capital for Infrastructure Projects in Kenya: Lessons from South Africa

This article was produced by Control Risks, a member of IPFA. 

Increasingly, the Kenyan government is trying to leverage local institutional capital to fund infrastructure projects. These efforts are driven by dwindling external funding due to shifting geopolitics, as well as sustained challenges to the country’s sovereign debt against the backdrop of its infrastructure deficit.

This article explores some key considerations regarding unlocking domestic institutional capital in Kenya, drawing on lessons from South Africa’s experience and the recently released report commissioned by the The National Treasury of Kenya to explore and recommend strategies for mobilizing local capital to finance Public-Private Partnership (PPP) projects, including:

– Regulatory barriers restricting local institutional participation
– Institutional conflicts & regulatory uncertainty elevating investor risks
– Weak disclosure practices driving integrity and reputational risks
– Utilising credit enhancement mechanisms to improve project bankability

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