US firm secure Sh452B funding for a 440Km Usahihi expressway

The construction of Usahihi Expressway is a 440-km dual carriageway linking Nairobi and Mombasa has gained momentum. “Usahihi” is a Swahili word which loosely translates to “done correctly”. The expressway is expected to cut travel time, boost regional trade and unlock economic opportunities along the Northern Corridor.

Indeed, this is a new chapter unfolding in Kenya’s transport infrastructure as inception plans are underway. The ambitious project estimated to cost Sh452 billion, has drawn the backing of Everstrong Capital, a US-based investment firm, which has committed to mobilising funds for its development.

As of February 2025, the project is in the feasibility study phase with construction expected to commence towards the end of the year and an anticipated completion timeline of 3-4 years.

Features of Usahihi Expressway

• Route and design: The expressway will span from Nairobi to Mombasa aiming to reduce travel time between the two cities from the current 10 hours to approximately 4.5 hours. It is engineered to accommodate trucks, buses, and automobiles, featuring rest stops, wildlife observation points, electric vehicle charging infrastructure powered by renewable energy sources and strategically located overpasses designed to facilitate safe wildlife migration.

• Financing and development: The project is structured as a Public-Private Partnership (PPP) with a Build-Operate-Transfer (BOT) model over a 30-year concession period. Usahihi will organize finance, construction, tolling, operation, and maintenance of the expressway for this period. This is the same model employed by the Nairobi Expressway. A US-based infrastructure investment firm, Everstrong Capital has signed a project development agreement with the Kenya National Highways Authority (KeNHA) to spearhead the project. The total investment is estimated at $3.6 billion (approx. Khh468 billion) with plans to raise Ksh129 billion from local investors including the pension funds and retail investors.

• Mandatory use for Heavy Vehicles: To decongest the existing Nairobi-Mombasa highway and enhance road safety, there is a proposal to mandate all heavy commercial vehicles to use the new expressway upon its completion. This move aims to reduce wear and tear on the current road infrastructure.

• Environmental considerations: The expressway has been designed with climate-sensitive features including wildlife observation points and overpasses aligned with animal migration patterns to minimize the environmental impacts.

A signing ceremony in Nairobi slated for Wednesday 5^th February, 2025 marked a crucial milestone as Everstrong Capital formalises the Transaction Advisory and Placement Services Agreement, setting the stage for the next phase of fundraising. Under the new fundraising arrangement, Kenyan investors will also have the opportunity to participate in the project.

The Expressway will represent the first major US-backed road project in Kenya, amid the ongoing competition between China and the US for economic and infrastructure development influence in the region.

EXTRA Also read this article about >> Proposed construction of Naivasha – Kisumu SGR (Phase 2B) is taking shape

China has been Kenya’s largest bilateral lender financing numerous infrastructure projects such as roads, railways, ports and energy projects. This has been often at the expense of the American firms. Some of the key projects include the Standard Gauge Railway (SGR), Lamu Port and Nairobi Expressway. US firms have struggled to compete due to China’s state-backed financing model and ability to offer the concessional loans.

However, in recent years, the US has been trying to regain influence especially through initiatives like the Partnership for Global Infrastructure and Investment (PGII) and the Build Back Better World (B3W) Initiative. Consequently, the US companies have also started investing in tech, energy and manufacturing sectors in Kenya.

For Usahihi Expressway, the agreement between KeNHA and Everstrong follows a previous deal with Bechtel Engineering that fell through in July 2022. Bechtel had declined to participate, citing inflated costs associated with a proposed toll fee model, which they argued would increase the project’s total cost to Ksh1.6 trillion.

Everstrong Capital, founded in 2015, focuses on developing critical infrastructure in Africa to improve the welfare of local populations. The firm aims to achieve financial returns for investors through projects in energy, transportation, and communication.

The US government is expected to play a key role in financing the project with American Development Finance Institutions leading the investment alongside Kenyan private sector investors and pension funds.

Credits: Evergstrong Capital Ltd.

GIS training courses catalogue: Here ++ | E-mail address: geo@orbital.co.ke | WhatsApp No: +254 719 672 296