Japan finances $270m industrial hub for Kenya

Kenya has secured nearly $270m from Japan to build a new industrial and commercial hub near the port of Mombasa.

The loan and grant package will fund basic infrastructure for a 1,326-hectare special economic zone (SEZ) at Dongo Kundu, intended to boost Kenya’s economy and accelerate the movement of goods in East Africa.

Kenya and Japan signed the MoU in Japan at the Tokyo International Convention on Africa Development, which concluded 28 August.

The $269.7m on offer breaks down into a long-term, low-interest loan of $210.8m and $58.9m in grants.

The first phase of the SEZ is scheduled to be ready by 2019, and is part of Kenya’s plan to ramp up capacity at Mombasa, eastern Africa’s biggest port, which has seen the volume of goods flow-through increase beyond forecasts. 

The project involves the development of infrastructure, including Berth 1 at the Port of Mombasa, access roads, transmission lines, a water supply pipeline, a sub-station, drainage, power supply and a free trade zone on between 300 and 500 acres.

The area will be reserved for re-exports to the 400 million-person Common Market for Eastern and Southern Africa (Comesa), allowing trans-shipment of cargo without inspection or customs duty. The Comesa bloc is the largest export destination for Kenyan goods.

Up to 6,800 direct jobs will be created in the first phase of construction, the MoU said.

Japan will be involved in running the project. Japan’s ambassador in the country will co-chair a committee overseeing the work.