African Development Bank has approved a €345 million (KSh 39.18 billion) loan for the construction of the Mombasa-Lunga Lunga/Horohoro and Tanga-Pangani-Bagamoyo roads Phase I in Kenya and Tanzania.
The financing is in the form of African Development Bank and African Development Fund loans and represents 78.5% of the total €399.7 million (Ksh 45.4 billion) project cost. The European Union contributed a grant of €30 million (Ksh 3.4 billion), 7.7% of the total project cost, to the government of Kenya.
The road is a key component of the East African transport corridors network, connecting Kenya and Tanzania. Producers, manufacturers and traders will be able to move goods more quickly and cheaply. In addition, farmers and fishermen will benefit from improved access to local and regional markets and amenities, including better schools and health centres.
“The project will have spillover benefits for hinterland countries such as the Democratic Republic of the Congo, Burundi, Rwanda, Uganda and South Sudan that depend on Mombasa as gateway to global markets,” said Hussein Iman, the Bank’s Regional Sector Manager for infrastructure, private sector, and industrialization.
The Bank’s support will also provide roadside trading facilities for sellers, half of them women who currently operate in disorganized and unsafe conditions.
The road crosses regions with high rates of youth unemployment. In light of this, the project includes a vocational training component for 500 unemployed youth (half of them women) to acquire marketable skills and improve their economic prospects.
The Bank anticipates that the intervention will boost regional integration by reducing transit times, facilitating trade and the cross-border movement of people, opening access to tourist attractions. The project will also link the ports of Dar es Salaam, Tanga and Mombasa, and stimulate the blue economy in coastal areas.
This first phase involves the construction of 175 km of road sections: the 121 km Mkanga-Pangani road section in Tanzania and the 54 km Mombasa-Kilifi road section in Kenya.
The intervention is a priority item in the Bank’s Eastern Africa Regional Integration Strategy (EA-RISP), the Country Strategy Papers (CSPs) of both countries and aligns with two of the Bank’s High 5 priorities – Integrate Africa and Improve the quality of life for the people of Africa.
Regional integration is a priority for Kenya, and Tanzania. However, poor infrastructure has been a major constraint.
As at the end of November 2019, the Bank’s portfolio in Kenya comprises 27 public and 7 private operations with a total commitment of 2.7 billion euros.
The Bank’s portfolio in Tanzania as at the end of November 2019 comprises 21 public and 2 private operations with a total commitment of 1.82 billion euros.