An ‘age of choice’ for infrastructure financing? Evidence from Kenya

Research reports and studies
April 2017

Primarily implemented at the national and subnational levels, the Sustainable Development Goals (SDGs) – also known as ‘Agenda 2030’ – set out a range of ambitious international development goals and targets. To achieve these goals, financial resources will have to be scaled up, especially financing for infrastructure.

There is evidence of a lack of strategic management of sources (and providers) to finance the infrastructure sector, despite the large volume of funds channelled and priority attributed to this sector in national development strategies. On top of that, very few studies have used sector-specific frameworks to analyse the changing finance landscape and the challenges it poses to recipient country governments. This study on the infrastructure financing landscape in Kenya – together with a companion report on Ethiopia – aims to fill this gap by identifying the approaches and strategies that recipient country governments have in place when negotiating with different finance providers and what lessons can be learnt from the country case study.

This report finds that Kenya is a fast-growing economy with access to a growing range of financing options and the government has clear plans for the infrastructure sector and a clear prioritisation of this area. This is reflected in the high and rising share of government and external financing being channelled to infrastructure. The country has been successful in mobilising a range of external financing sources and in diversifying its sources of financing for infrastructure development and met many of its objectives in this regard.