Kenya

Kenya weighs new funding models to keep mega projects on track

By NowinAfrica Editorial Board • August 3, 2026 • Kenya

A wide photograph of a modern African capital city skyline at dusk with high-rise buildings and construction cranes visible.

Kenya is weighing new financing arrangements to keep its pipeline of large-scale infrastructure projects moving, according to the-star.co.ke, as the East African economy seeks to balance its development ambitions with growing concerns over debt sustainability.

An elevated toll road with concrete pillars and a toll plaza structure, with vehicles on the carriageway and Nairobi cityscape in the distan

The country has in recent years rolled out a series of flagship builds, including the Chinese-funded Mombasa–Nairobi Standard Gauge Railway, the Nairobi Expressway delivered under a public-private partnership, and ongoing works along the Lamu Port–South Sudan–Ethiopia Transport corridor. Many of these ventures were financed through sovereign borrowing or bilateral loans from Beijing, leaving Nairobi with a heavier debt burden at a time when global interest rates have climbed.

According to the-star.co.ke, policymakers are now considering alternative funding structures that would spread the cost of major projects across longer horizons and draw in private capital. Kenya’s Public-Private Partnerships Act, enacted in 2021, provides a legal framework for such arrangements, and officials have previously pointed to toll roads, power generation and port expansion as areas suited to private investment.

Multilateral lenders, including the International Monetary Fund, have repeatedly urged Kenya to widen its revenue base and rein in borrowing, while also encouraging concessional financing for transformative projects. Beijing remains a dominant creditor, having bankrolled the SGR and several hydropower schemes, though renegotiations of Chinese loan terms have been a recurring feature of recent bilateral talks.

Analysts note that the success of any new model will depend on investor confidence, transparent procurement and the capacity of state agencies to manage long-term contracts. With several mega projects still in the pipeline, the financing question is likely to remain central to Kenya’s economic planning in the years ahead.