main navigation menu miga logo
World Bank building

MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

Young woman bending down to tending to her outside chores

Explore different types of political risk insurance guarantees provided to investors and lenders.

Hyundai building

Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Hands husking peas into a basket full of peas

Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

Subscribe to Our Monthly Newsletter
x

About Dropdown Description

World Bank building

MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

Our Impact Dropdown Description

Hands husking peas into a basket full of peas

Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

Our Products Dropdown Description

Young woman bending down to tending to her outside chores

Explore different types of political risk insurance guarantees provided to investors and lenders.

Projects Dropdown Descriptions

Hyundai building

Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Press Release

MIGA Further Supports Kenya Roads Modernization with New Investment

twitteremail

WASHINGTON, D.C., November 14, 2022 — The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) has guaranteed an equity investment by an additional investor to help upgrade Kenya’s national roads network. MIGA’s guarantees now cover $37.5 million in equity investments from a company acquired by the new investor, AIIF4 Seed Partnership GP, a fund managed by African Infrastructure Investment Managers (AIIM), which will own 74 percent equity in the project. MIGA is also guaranteeing $135.3 million in loans from Stanbic Bank Kenya Limited, a subsidiary of Standard Bank of South Africa, and $13.3 million in equity investments from existing investor Mota-Engil Africa of Portugal, for a total of $186.1 million in guarantees.

The 10-year guarantees provide protection from the risk of transfer restriction, expropriation, war and civil disturbance, and breach of contract for the equity investments, and expropriation, war and civil disturbance, and breach of contract for the loans. The project encompasses the financing, design, rehabilitation, upgrade, and maintenance of road sections in central and western Kenya. 

Roads are the primary mode of transport in Kenya, but only a limited portion are paved and in good condition. Because most of the network consists of gravel and earth roads, the government of Kenya has prioritized the improvement of the country’s road network through selected public-private partnership programs. Under the Annuity Program, the road network is divided into lots for which concessions are awarded to private investors.

The Annuity Program represents a new model of private sector participation, which was created as an alternative financing mechanism to alleviate pressure on the government’s budget and bridge the financing gap in the roads sector.  It is anticipated that under the Annuity Program, the government will be able to upgrade up to 10,000 km of Kenyan roads and to attract an estimated total private investment of up to $2.8 billion. The projects for Lots 15 and 18 are being financed with a 75:25 debt-to-equity ratio, with Stanbic Bank providing loans in Kenya shillings. 

“MIGA’s guarantees are enabling private lenders and equity investors to offer Kenya financial support to improve important segments of its road network,” said Hiroshi Matano, MIGA Executive Vice President. “Upgrading the national road network will benefit rural communities and strengthen resilience to climate change.”

After completion of the road improvements, Kenyan residents will enjoy shorter travel times and be able to drive faster and bypass densely populated areas. Reduced vehicle operating costs and greater fuel efficiency will also benefit Kenyan drivers. Just as important, the road improvements will contribute to flood resilience because of improved road drainage.

“We look forward to partnering with MIGA, Mota-Engil, Stanbic Bank, and the government of Kenya on this expansive project, which will contribute to a number of the United Nations Sustainable Development Goals,” said Ed Stumpf, Investment Director at AIIM. “This includes SDG 9 (building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation) as the roads will be essential to growing Kenya’s urban centers and enabling the transportation of logistics at scale, and SDG 8 (decent work and economic growth), with the project employing up to 400 staff at its peak construction phase.”

Residents of 10 counties in Kenya will benefit from improvements to Lots 15 and 18. Lot 15 is in the central part of Kenya, while Lot 18 is in the western part of the country. Approximately 44.9 kilometers of roads in Lot 15 in central Kenya and 35.1 kilometers in Lot 18 in the west will be upgraded from gravel to asphalt standards. Two companies were created to manage the concessions, Infraconnect Fifteen Kenya Limited (Lot 15) and Infraconnect Eighteen Kenya Limited (Lot 18).

“Our partnership with Mota-Engil, AIIM, MIGA, and the government of Kenya in this landmark public-private partnership transaction will upgrade roads to connect local communities, stimulate trade, lower the cost of transport and generate local jobs,” said Jonathan Muga, Head, Infrastructure, P&I Sector, Stanbic Bank.

 

###

 

About AIIM

AIIM, a member of Old Mutual Alternative Investments (OMAI), has been investing in the African infrastructure sector since 1999 with a track record extending across seven African infrastructure funds. AIIM’s team of 40+ investment professionals are based out of five locally staffed offices across the continent in Cape Town, Johannesburg, Nairobi, Lagos, and Abidjan, providing direct on-the-ground coverage of our key markets. AIIM manages an aggregate AUM of $2.4 billion in assets across the power, renewable energy, digital infrastructure, mid-stream energy and transport sectors with operations in 19 African countries. AIIM is a licensed FSP approved by the Financial Sector Conduct Authority in South Africa.

OMAI is a private alternative investment manager in Africa, with over $4.8 billion (ZAR76 billion) under management in infrastructure, private equity, hybrid equity and impact funds. It is a member of Old Mutual Investment Group, the investment management arm of Old Mutual. For more information, please visit: https://aiimafrica.com/.

 

About MIGA

MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.

Since its creation, MIGA has issued nearly $70 billion in guarantees across 122 developing countries in support of nearly 1,000 projects.

 

Contacts:

In Washington:  

Elizabeth Howton, (202) 458-5922, ehowton@worldbankgroup.org

 

For more information, please visit: https://www.miga.org

Stay updated via Twitter: https://twitter.com/MIGA

Follow us on LinkedIn: https://www.linkedin.com/company/wb-miga 

twitteremail