Infrastructure

How State Plans to Finance Sh995bn Mega Dams Project

A total of 56 dams will be implemented under the PPP model.

Updated on

February 28, 2024

Water Cabinet Secretary (CS) Zacharia Njeru. PHOTO | FILE

The Kenyan government is seeking to construct 100 mega dams countrywide in the next five years, to address water shortage issues while enhancing food security and hydropower generation.

According to the Water Cabinet Secretary (CS) Zacharia Njeru, 56 dams have already been identified and recommended for implementation under the Public Private Partnership (PPP) model.

At least Sh995 billion will be spent on the projects to achieve full coverage of the National Water and Sanitation Investment and Financing Plan framework by 2030.

“By investing in water storage, investors can help address water security while also earning a return on their investments,” he said.

The CS was speaking on Monday in Nairobi during a press briefing ahead of the Water and Sanitation Investors Conference to be held in the city next week.

Concessional financing

In terms of funding of the projects, Water Principal Secretary Julius Korir noted that about 40% (Sh395 billion) will be from concessional financing, and 31% (Sh313 billion) from PPPs.

About 11% (Sh105 billion) from public contributions including National and County revenues, 8% (Sh77 billion) from donor grants, while Sh82 billion will come from commercial financing.

This is part of a highly ambitious state-backed project that seeks to construct 100 mega dams and 1,000 small dams countrywide for hydropower generation, irrigation, livestock and domestic use.

In June last year, the Water CS Alice Wahome said the government was offering public land to investors to facilitate the construction of 100 mega dams on a PPP model.

The CS told prospective investors that they would be required to build dams with their own funds and sell water to State-owned water agencies to recoup their investments.

The deals with private investors will help the government to pursue capital-intensive water projects across the country without taking loans.

Six million homes

“Once the project is completed, it will be taken over by the national government. The government will implement this initiative through its Water Works Development Agencies, which will cover all nine regions of the country,” Ms. Wahome said.

The project aims to provide water to six million homes and raise the acreage under irrigation to one million acres, while generating 554MW of hydropower.

Eventually, the State hopes to facilitate the construction of 100 large and 1,000 small dams countrywide in a bid to bring three million acres under irrigation.

The government is targeting to raise acreage under irrigation to three million acres from the current 670,000 acres, which is not sufficient to provide the needed food security.