President William Ruto’s administration has announced ambitious plans to renovate the Ports of Lamu and Mombasa. The government will upgrade the coastal ports under a Public-Private Partnership (PPP) model. The move is amidst rising regional competition, especially from the ports of neighbouring countries. The Kenya Ports Authority (KPA) lacks the capital to fund the upgrade by itself, the National Treasury has announced. Private finance will therefore be sought to minimise over-reliance on foreign borrowing. Kenya is at high risk of debt distress, and therefore, PPPS present a credible alternative.
Similar measures are being witnessed across East Africa, with Tanzania also negotiating with the Adani Group for its own port expansion. To raise local finance, Kenya will offer infrastructure bonds to long-term investors. These include pension and insurance firms. However, it is expected that the Ports of Lamu and Mombasa will reach financial closure within a timeframe of three years. The project also includes the expansion of container terminals, dredging, and improved cargo handling.
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Mombasa port to expand with $122 million (Sh15.7 billion) upgrade
Scope of Implementation on the Ports of Lamu and Mombasa
The scope of the project at the Ports of Lamu and Mombasa is expected to be extensive. It includes refurbishing the container terminal and dredging to receive larger vessels in Mombasa. Furthermore, development of the port of Lamu will serve landlocked northern neighbors such as Ethiopia and South Sudan. The two ports will be run by private operators when completed to boost efficiency. The aim is to increase cargo volume capacity and reduce delays.
Moreover, the Ports of Lamu and Mombasa serve a vital role in the trading system of East Africa. Mombasa presently serves Uganda, Rwanda, and the DRC. On the other hand, Lamu increases Kenya’s visibility in regional trade to the north. The growth aligns with KPA’s targets, as Captain William Ruto highlighted in late 2024. In his view, there was an increase in container volumes and efficiency at the ports. Under the PPP model, the ports are expected to deal with growing demand and promote the economic competitiveness of Kenya in the region.
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Construction of the second container terminal at Mombasa port on track
