President Ruto Seeks out Public-Private Partnership Deals on China Rendezvous

President William Ruto is looking for public-private partnerships with Chinese companies, since there are growing fears that some of the unfinished Chinese-funded infrastructure projects, such as the railway, could become white elephants.

Dr. Ruto, who is now in China, oversaw the signing of a memorandum of understanding with two Chinese corporations, China Energy International Group and telecoms behemoth Huawei, on Monday. He attempted to entice Chinese corporations to take advantage of potential in Kenya’s energy and ICT sectors.

“Kenya is a great champion of renewable energy and that is why our grid is almost 93 percent renewable and that is a deliberate decision made. I’m very happy you have technology that can work with us for leverage on our renewable assets,” he told Chinese investors.

“We want to persuade you and your company to look at opportunities of working with us as the government of Kenya to unlock the opportunities of energy as part of enhancing the energy pool not just in Kenya but also in our region.”

Dr. Ruto’s visit follows the government’s intensified efforts to strengthen trade and commercial ties with the Far East’s economic powerhouse. Meetings scheduled during the three-day trip to China are also likely to include negotiations on deals that will release fresh financing for infrastructure projects such as highways.

But because his crew kept quiet, little is known about the specifics of the transactions.

Following the completion of the second phase of the multi-billion shilling standard gauge railway (SGR) project, China has mostly stopped providing new funds to Kenya in recent years.

The MoU with China Energy International Group calls for modernizing power generation, transmission and distribution lines, and substations in addition to optimizing the electrical power system.

Rigathi Gachagua, the vice president, said last week that the president would look for extra financing to finish blocked road projects.

Utilizing and realizing the possibilities of improved energy storage and renewable energy sources are also covered by the agreement.

Meanwhile, the agreement with Huawei paves the way for cooperation on Kenya’s ICT infrastructure development and the promotion of digitalization in all areas. Public-private partnerships are agreements between organizations from the public and private sectors, with the usual arrangement being the delivery of a public good or service.

The Public Private Partnerships (PPP) Directorate, which is located at the Treasury and is charged with initiating, directing, and coordinating the selection, ranking, and prioritization of public-private partnership projects within the public budget framework, is in charge of putting public-private partnerships into action in Kenya.

Seven PPP projects, including the Sh99.6 billion (Sh667.8 million) Nairobi Expressway Project, were been approved by the agency as of September 2021.

The seven PPP projects that have been approved cost a combined Sh181.6 billion ($1.2 billion), with a substantial portion coming from a debt-equity combination.