AfDB says public funds insufficient to support Kenya's infrastructure projects – Business Daily
Africa50 CEO Alain Ebobisse (at the center) at the Africa50 General Shareholders Meeting in Marrakech, Morocco. PHOTO | COURTESY
Kenya should look for alternative funding sources to enable it finance big infrastructure projects such as internet, solar, roads and power lines due to cash constraints.
The African Development Bank (AfDB) President Akinwumi Adesina said such initiatives require billions of shillings, coming at a time when the country together with other African nations are grappling with economic impacts caused by the Covid-19 pandemic and the ongoing Russia-Ukraine war, which have impacted revenues and affected global supply chains.
The shutdown of the economy constrained Kenya’s budget collections, forcing the Government to reduce allocations to mega infrastructure projects that were deemed unnecessary to support other sectors of the economy.
“Yet, there is much to do to meet Africa’s infrastructure financing needs, which is estimated to be between (Sh8.1-Sh12.8 trillion) US$68-US$108 billion per year,
“Public funds will not be sufficient in these challenging times. Therefore, we must tap all possible funding sources, from multilateral institutions and development partners to the private sector and institutional investors,” Mr Adesina said during the opening ceremony of Africa50’s General Shareholders meeting in Marrakech, Morocco.
Africa50 has lately increase its investments on Kenya’s internet, data center and transmission line initiatives.
In February, for example, Pan-African cloud and data centres provider PAIX Data Centres received $20 million (Sh2.3 billion) funding to expand its services across the continent.
The series B funding, which forms the first tranche, came from Africa50, an African infrastructure investment platform.
The firm, which currently operates two data centers in Kenya and Ghana, will fund the company’s data centre capacity expansion and growth plans into new African data centre markets.
Likewise, affordable internet provider, POA Internet also got $28 million (Sh3.18 billion) from Africa50, a financing vehicle backed by the Africa Development Bank (AfDB) Group as well as African Countries.
The Series C funding round was led by Novastar Ventures and Africa50, bringing its total funding raised so far to $36 million (Sh4.1 billion).
The internet company in 2020, participated in the Africa50’s innovation challenge that was looking for cheap and reliable solutions for last-mile internet connectivity across the continent.
The firm’s proposal emerged the best after it beat 673 participants across the world, securing investment as well as cash prize.
The internet company says that it currently serves over 12,000 customers (homes and small businesses) in Nairobi’s low and middle-income neighborhoods as well as tens of thousands more through its street Wi-Fi connections.
It charges its customers as low as Sh1,500 per month, which is lower than those offered by Safaricom. For instance, Safaricom Home Fiber monthly payment starts from Sh2,999.
Africa50 CEO Alain Ebobisse said they are targeting firms in irrigation systems, roads, parts, railways, electricity, energy; digital, among others.
“Infrastructure is the key for any strong economy. Having good idea is not enough. we need structures on how to Implement them,” Mr Ebobisse said.