Road Annuity Lot 32 Project in Kenya
On December 23, 2022, the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group issued guarantees totaling US$51.44 million to Standard Bank of South Africa Limited and Stanbic Bank Kenya Limited for their non-shareholder loans (including interest) into the Skar Lot 32 Development Corporation Limited for the construction, rehabilitation, upgrading, operation, and maintenance of an existing 66.5km rural road in Kenya (the “Project”). The MIGA guarantees will cover the risks of Transfer Restriction, Expropriation, Breach of Contract, and War and Civil Disturbance for a period of up to 8.5 years.
This is the second road project MIGA has supported in Kenya under the Government of Kenya (“GoK”)’s Road Annuity Program. After completion of the Project, the road will be upgraded from earth/gravel road to bitumen standards.
The project is a category A under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary.
The Project is aligned with World Bank Group’s Country Partnership Strategy for Kenya particularly in relation to enhanced infrastructure and logistics for sustainable growth, and the GoK’s second and third Medium-Term Plans to promote a safe and efficient transport network. The upgrade of the road will result in material travel time savings. The Project also has potential benefits beyond the direct users of the road by contributing to greater integration of the road’s influence area with the rest of the country’s key economic centers, which in turn brings new economic opportunities for the local people. MIGA’s support to the Project will complement World Bank’s investments in the road sector in Kenya.
The Project will include earthworks, concrete works and drainage works, which will yield climate adaptation co-benefits. Climate adaptation measures to improve the resilience of the road will include elevating road sections and enhancing road drainage by constructing deeper and wider road drains, pipes and culverts.