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Business Now: Seven Public-Private Partnerships investments closed in a year

Winnie Cheptoo - May 16, 2022 - 0 comments

The Public-Private Partnerships Directorate says a review of the PPP Act that cut bureaucratic processes and aligned public entities involved in PPP projects has seen investments increase 600% over the past year.

The Director General of the Directorate of Public-Private Partnerships, Christopher Kirigua says the review that was done in 2021 saw more investors from Asia and Europe troop into Kenya for PPP deals.

said during a forum hosted by Kenyan Pension Funds Investment Consortium (KEPFIC), USAID and MiDA Advisors: “Between the time the PPP unit was established in 2010 and 2020 we had only managed to close one project. However, in 1 year after the changes in the institutional framework we have achieved financial close on seven projects.”

Some of the interventions in the PPP Act include a reduction in the number of processes for approvals required for investors from 13 to just 3, restructuring how the projects are done to balance the risks between the government and private investors, allowing pension schemes to allocate up to 10% of their portfolio to infrastructure investment.

“We recently concluded a transaction in the road sector where we had a local pension fund invest. We are also looking at creating credit-linked notes which will allow institutional investors to participate in a big way in infrastructure development,” Kirigua said.

He was addressing a delegation of U.S. institutional investors who were in Kenya scouting for business opportunities. The visiting U.S. pension funds and foundations delegation are keen on investing $500 million (Kshs 60 billion) in the region’s infrastructure, education, housing, agriculture and healthcare among other sectors.

This was the fourth U.S. Institutional Investor delegation trip to different regions in Africa since 2017. The past delegation engagements have invested $1 billion into Africa and other emerging markets.

Ngatia Kirungie, KEPFIC Head of Secretariat noted: “Together with our partners MiDA Advisors, KEPFIC is happy to coordinate and bring to the table US and foreign expertise infrastructure investments for our members here in Kenya so we can collaborate and make joint investments.

“Today we have a delegation of funds that represent over $1 trillion worth of management that are all looking to invest Pan-Africa wide and in Kenya and we are happy to bring to the table a number of local opportunities through third party management funds that cover a full spectrum of infrastructure, housing, renewable energy.

“We will also be going on a number of site visits to a number of projects including a hospital where one of the private equity funds we are talking to today is investing and a power project in the outskirts of Nairobi.”

Aymeric Saha, Chief Executive Officer MiDA Advisors noted: “Our mandate here is to work with Kenyan pension funds – KEPFIC members we are seeking co-investments. Just six months ago we announced over $100 million of co-investments where 3 American pension funds invested for the first time in Africa in partnership with 3 Kenyan pensions investing in SMEs.

“We are also involved in supporting KEPFIC work in infrastructure and we are very pleased that some transitions are starting to close. Kenya in particular has been doing well, growing consistently over the last 10 years, we have noticed that it is a way for us to diversify our investments globally and also get enhanced returns by making allocations to Africa markets and particularly in Kenya which stands out.”

KEPFIC is a consortium of 24 public and private sector pension schemes in Kenya that hold about Kshs 500 billion in assets and have come together for the purpose of collaborating to make long-term investments in infrastructure, affordable housing, and energy, providing competitive returns and diversification opportunities to members.

Since 2020, KEPFIC has evaluated big-ticket infrastructure projects with the goal to deploy more than Kshs 25 billion into transportation, energy, and affordable housing by 2025. Co-investments with U.S. pension schemes can help close Kenya’s infrastructure funding gap of Kshs 200 billion.

KEPFIC is supported by the U.S. Government through USAID’s Kenya Investment Mechanism, Power Africa, the World Bank Group, and MiDA Advisors (in partnership with USAID INVEST) and provides an opportunity for beneficial collaboration between Kenyan and American pension funds and other institutional investors.

This post originally appeared here on May 1, 2022.

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