China-backed Nairobi Expressway opens in Kenya, paving way for more cautious financing model

US$668 million tollway linking capital to country’s main airport built by public-private partnership reflects Beijing’s wariness

Chinese firm to recoup its investment by charging toll fees for 27 years before transferring it to Kenyan government

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Kenyan President Uhuru Kenyatta cuts the ribbon at the commissioning ceremony of the Nairobi Expressway financed by the China Road and Bridge Corporation in Nairobi on Sunday. Photo: Reuters

Published: 7:00am, 2 Aug 2022Updated: 3:00pm, 2 Aug 2022

The Nairobi Expressway built and financed by the state-owned China Road and Bridge Corporation has officially opened for public use, reflecting a new financing model for Beijing and its trade-focused Belt and Road Initiative in Africa.

Kenyan President Uhuru Kenyatta on Sunday officiated the commissioning of the expressway, which links the country’s main airport to the capital city Nairobi. The road spans 27.1km (16.8 miles) and was financed for US$668 million by the state-owned China Communications Construction Company, CRBC’s parent company.

The elevated dual carriageway materialised through a public-private partnership model in which the Chinese firm will recoup its investment by charging toll fees for 27 years before transferring ownership to the Kenyan government.

The tollway marks a gradual shift in how belt and road projects in Africa like highways and power plants are financed. Previously public-debt financing was the norm.

More than before, Chinese lenders have taken a cautious approach in lending to infrastructure projects. China’s policy banks are concerned about borrowers’ ability to repay loans and thus warier about extending finance.