AfDB gives Sh195m grant for Lamu port

[MK254]

The ship which is drilling the LAPSSET corridor at Mkanda channel where ships will be passing to and from the port on October 23,2016.PHoto Alphonce Gari


Efforts by the government to attract investors to help build 29 berths at the proposed Lamu port has received a boost from African Development Bank.

The pan-African lender last week gave a $1.9 million (about Sh194.86 million) grant to cater for advisory services and technical support in developing a feasible plan for the port.

The funds, through AfDB's New Partnership for Africa’s Development Infrastructure Project Preparation Facility, will position the proposed Lamu port as an attractive venture for big-ticket investors.

The port has 32 berths whose construction cost is estimated at $5 billion (Sh512.8 billion). The cost for the first phase of the project's three berths is estimated at $689 million (Sh70.7 billion). The amount will cover dredging and reclamation, construction of berths and yards, construction of revetment, causeway and road, construction of buildings and utilities, and procurement of equipment and tug boats among others.

The construction of the first three berths is being funded by the government, while the remaining 29 will be financed through public-private partnerships under the build-operate-transfer model.

“The construction of the first three berths is ongoing with completion date of July 2018 for the first berth, and December 2020 for the next two at a cost of $480 million (Sh49.2 billion),” AfBD and Lapsset Corridor Development Authority said in a joint statement.

The proposed port is the core of the Sh2.5 trillion Lamu Port Southern Sudan- Ethiopia Transport Corridor, whose implementation has suffered funding challenges since its commissioning on March 2, 2012.

The government is, however, calling on the private sector to fund the project, which will see the country have a second major sea port at Lamu.

“Lamu Port has an economic internal rate of return for the long-term development plan of 23.4 per cent,” Lapsset authority CEO Silvester Kasuku told the Star in an interview.

“The projected demand forecast for freight and passengers for the years 2020 and 2030 illustrate that the total dry cargo throughput at Lamu port would be 13.5 million tonnes by 2020, and 23.9 million tonnes by 2030.”

The authority hopes to lease the first berth to the private sector by the end of 2018.

The construction of the port headquarters and port police station are complete. Electric power connection to the national grid and water reticulation networks are also in place.

AfDB gives Sh195m grant for Lamu port

 

[Edward Wanjala]

How many aspects are being funded here, everyday i wake up on the news of financing, i don't know who is financing what here at the LAPSSET!! I heard of a South African Bank also funding something here!!

 

[Jay456watt]

32 berths wah!! but i doubt it will be complete by 2030...

 

[Quickly]

How many aspects are being funded here, everyday i wake up on the news of financing, i don't know who is financing what here at the LAPSSET!! I heard of a South African Bank also funding something here!!

modern large construction projects are often very complex. For example, there are several contractors on site, each with its own function, the project itself is owned by a the govt, supervised by an engineering consultant and executed by a contractor or consortium of contractors.
The financing aspect as well is equally complex where you find different components of a project funded by different agencies e. g a road project can have 60% govt funding by central treasury, 15% by Kenya roads board and the remainder by an external agency like AfDB or WB. Its a way of spreading risk and freeing up funds for other govt functions

 

[Edward Wanjala]

modern large construction projects are often very complex. For example, there are several contractors on site, each with its own function, the project itself is owned by a the govt, supervised by an engineering consultant and executed by a contractor or consortium of contractors.
The financing aspect as well is equally complex where you find different components of a project funded by different agencies e. g a road project can have 60% govt funding by central treasury, 15% by Kenya roads board and the remainder by an external agency like AfDB or WB. Its a way of spreading risk and freeing up funds for other govt functions

Well put Quicky, having people like you on forums is very useful. Meaning at this rate, the LAPSSET is already getting the needed multiple sources of funding for different aspects of the project?