Japan lends Kenya Kshs. 25 billion for Mombasa port expansion

Japan lends Kenya Kshs. 25 billion for Mombasa port expansion

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Kenya signed a Kshs. 24.729 billion loan agreement with the Japanese government on Friday, to be used for the expansion and improvement of the east Africa’s biggest port of Mombasa, a loan Japan said was its largest to Kenya since the two countries started diplomatic relations in 1963.

The loan, whose signing took place at the Kenya Ports Authority (KPA) headquarters in Mombasa, will be used to construct a new container terminal, and procure cargo-handling equipment in response to the increasing demand in cargo volumes within the region, transport and infrastructure cabinet secretary Michael Kamau, said.

KPA has been under pressure to improve its efficiency in cargo handling and clearance, from the region that continues to grow its import and export volumes.

The port is seen as a measure for economic activity in east Africa as it handles fuel, consumer goods and other imports for Uganda, Burundi, Rwanda, South Sudan, Democratic Republic of Congo and Somalia, and exports of tea and coffee from the region.

Container traffic through the port grew by 11.9 percent in 2014, hitting one million, Twenty foot equivalent units (TEUs) from 894,000 TEUs in 2013, and port management said they expected a 30 percent further increase to 1.3 million TEUs in 2015.

Tatsushi Terada, Japanese ambassador to Kenya said during the signing, that projects implemented using the loan would have a major positive impact on economies of Kenya and regional countries using the port.

“It is the hope of the government and the people of Japan that the financial assistance will be utilised efficiently to improve the social and economic development of Kenya and the region at large,” Terada, said.

KPA embarked on a massive expansion programme that includes building of a new berth 19, a second container terminal and a dredging exercise to increase the depth of sea water along the entry-channel into the port, so that bigger vessels are able to dock at the port.

The port is also procuring state-of-art equipment to facilitate efficient and fast handling of cargo.
Kenya also plans a second port in Lamu, with a capacity of 23 million tonnes per year, though the project has been affected by delays.