Kenya pivots to China, away from France for R28bn highway deal

Kenya will terminate a €1.3bn (R28.37bn) highway expansion deal with a consortium led by France's Vinci SA with the project expected to go to a Chinese contractor instead, government officials and sources said.

The deal to turn 140km of single-lane road into a multilane highway linking the capital Nairobi to the Rift Valley city of Nakuru was signed in Paris in 2020 during a visit by then-President Uhuru Kenyatta.

Kenya's decision to end the contract comes after government authorities had sought to revisit the terms of the agreement, which the Kenya National Highways Authority (KeNHA) said put the risk from insufficient traffic demand onto the government.

"KeNHA requested a restructuring of the contract ... but the proposal was considered unbankable thus creating a stalemate," the agency told Reuters.

This led to KeNHA issuing a notice of termination to end the public-private partnership contract, it said.

Highway construction for the project had not yet begun.

French private equity group Meridiam SAS and Vinci Concessions — also a part of the French infrastructure group — are members of the consortium that is led by Vinci Highways.

Vinci declined to comment on the contract's termination. Meridiam did not immediately respond to a request for comment.

Meanwhile, two sources with direct knowledge of the government's plan said the contract would be going to a Chinese company, which has not yet been disclosed.

The sources asked not to be named as they were not authorised to speak to media.

Kenya's finance minister John Mbadi led a team of officials to Beijing this month, where they met senior officials. Domestic media have reported that President William Ruto will be heading to China for a state visit later this month.