Usahihi Expressway Limited, the firm spearheading the proposed Nairobi-Mombasa Expressway, has announced that it expects to complete the project’s feasibility study by May. This marks a significant milestone towards the commencement of construction on the 440-kilometre toll highway, a key infrastructure initiative under the public-private partnership model.
A feasibility study is a critical assessment that evaluates the practicality and impact of a project, taking into account various aspects such as environmental concerns, economic viability, and potential resettlements. Upon completion of this phase, Usahihi Expressway Limited, backed by US-based Everstrong Capital, will seek final approval from the National Treasury’s Public-Private Partnership (PPP) unit. If granted, the project is expected to reach financial closure by the end of 2025, with construction projected to commence in early 2026.
Chairman Kyle McCarter affirmed the company’s commitment to securing the necessary funds, revealing that a fundraising agreement was signed in February. The company is targeting a total of Sh129.3 billion ($1 billion) from local banks and pension funds to support the highway’s development. CPF Capital and Advisory has been entrusted with transaction advisory and placement services, and is set to mobilize the funds domestically by year-end.
Meanwhile, Everstrong Capital will source an additional Sh323.4 billion ($2.5 billion) from international markets, bridging the financing gap and bringing the total estimated cost of the expressway to Sh452.8 billion ($3.5 billion). The US-based firm is also investing Sh12.9 billion ($100 million) for land acquisition along the proposed route. Uniquely, landowners affected by the project will have the option to swap their property for equity in the expressway, with a promised return of 17.5%.
The expressway, once completed, aims to drastically reduce travel time between Nairobi and Mombasa from over eight hours to just 4.5 hours, revolutionizing transportation efficiency in Kenya. The project is also being positioned as a novel investment opportunity for local pension funds, which have historically had limited access to long-term assets with sustainable returns.
“There is about $1 billion in interest from pension funds. For the first time, they will have access to a 30-year asset, matching their long-term investment needs,” noted McCarter.
As the feasibility study nears completion, stakeholders eagerly anticipate the next phase of this ambitious infrastructure project, which is set to reshape Kenya’s transport landscape and provide lucrative investment opportunities for both local and international financiers.
