Kenya is inviting private investors to help develop and operate two critical Indian Ocean seaports, Mombasa and Lamu. This strategic pivot toward public-private partnerships (PPPs) comes as neighboring countries ramp up their port operations, and Kenya seeks to ease its reliance on external debt.

Details published on the Treasury’s official website show that the government is currently in the market for transaction advisers to help structure PPP agreements for both port projects.

The Kenya Ports Authority (KPA), which oversees port operations, lacks the financial muscle to undertake the expansions on its own.

The Treasury emphasized that mobilizing private capital is essential for easing the country’s fiscal pressures and accelerating infrastructure delivery.

Kenya submitted proposals in 2023 to lease segments of the Mombasa and Lamu ports to private operators, targeting at least $10 billion in annual revenues by 2030.

With limited fiscal space and rising debt flagged by the International Monetary Fund, the government is turning to the private sector to finance large-scale infrastructure projects like roads, ports, and airports.

According to Bloomberg, the government will also float infrastructure bonds designed to draw long-term capital from institutional investors such as pension funds and insurance companies.

These funds will support the construction of new berths at the Port of Mombasa and container terminals at the newer Lamu port.

Treasury officials estimate it will take up to three years to reach financial close on the projects.

Mombasa remains East Africa’s busiest port, serving as a critical transit gateway for Uganda, Rwanda, South Sudan, and northern Tanzania.

Lamu, which began operations in 2021, is strategically positioned to handle cargo from Ethiopia and South Sudan.

Kenya’s total cargo throughput has surged to 41.1 million tons in the last decade, while container traffic has doubled to 2 million twenty-foot equivalent units.

As part of the upgrades, Kenya will rehabilitate berths, enhance container terminal infrastructure, and dredge harbors to accommodate larger vessels.

The government plans to adopt a concession model under which a private operator will fully manage Lamu’s terminal and three berths, mirroring strategies already implemented in Tanzania, Djibouti, and Somalia.

With rising regional competition and limited state resources, Kenya’s bet on private capital could be pivotal in sustaining its maritime dominance and transforming its ports into high-performing logistics hubs for the continent.