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Press Releases

March 10, 2015

Signing of Japanese ODA Loan Agreement with the Republic of Kenya for Mombasa Port Development Project (Phase 2)
Applying Japanese technology to construction at the largest international port in East Africa to expand intraregional trade

photoThe signing ceremony at the KPA Headquarters

On March 9th, the Japan International Cooperation Agency (JICA) signed the agreement with the Kenya Ports Authority (KPA) in Mombasa, the Republic of Kenya, to provide a Japanese Official Development Assistance (ODA) Loan of up to 32.116 billion yen (approx. Kenya shillings 24 billion) for Mombasa Port Development Project Phase 2. This Japanese ODA loan project is the largest single project for Kenya since JICA commenced its cooperation with Kenya in 1963.

This project includes construction of a container terminal and provision of cargo-handling equipment at the Port of Mombasa, the largest commercial port in East Africa. This responds to the increasing demand for cargo volume and makes port management more efficient, with the objectives of promoting trade and contributing to socioeconomic development in the region overall, including Kenya and the neighboring countries.

Majority of the cargoes handled at this port are imported goods, such as fuel, iron and steel products, fertilizer, food, and Japanese used cars from Japan and other countries, but container traffic has been on the rise recently with the volume handled at the port more than tripling over the past decade from 300,000 TEUs (twenty-foot equivalent units) in 2002 to 900,000 TEUs in 2012. It is predicted that the demand will continue increasing, with a projection of more than 2.6 million TEUs in 2025. Given these circumstances, the Government of Kenya has made plans for a new container terminal, and with JICA’s support (a Japanese ODA loan for Mombasa Port Development Project (Phase 1), of which Loan Agreement was signed in November 2007), is moving forward with terminal construction, which is planned to be completed in 2016. However, even with the new terminal under construction adding capacity of approximately 580,000 TEUs, the total capacity will be 1.3 million TEUs, falling short of the projected 1.32 million TEUs of demand in the year 2016 The ability to meet the on-going growing demand will thus approach its limit, which may disrupt distribution of goods. In order to cope with a rapid increase in the volume of container cargo handled at the port, boosting the container-handling capacity is a priority.

In addition to the container terminal construction, KPA will invite a private operator to operate the container terminal under Concession Agreement between the operator and KPA for an efficient operation that can meet the rapidly rising container demand. As this will be the first case to allow a private firm to handle the operations of a port terminal in Kenya, there is a great deal of interest from within the country and abroad.

Through the implementation, advanced Japanese technology and management method will be applied to the project. As the ground where the terminal is being built is soft, there are difficulties in construction which will be addressed using special steel materials and ground improvement engineering, by applying construction technologies of Japan. The Government of Kenya has highly praised such Japanese technologies, which are being employed in the on-going construction of phase 1, and Japanese construction management as well.

As part of the Yokohama Action Plan announced at the 5th Tokyo International Conference on African Development (TICAD V), the Government of Japan committed assistance for “Accelerating Infrastructure and Capacity Development,” and has focused on five economic corridors in order to contribute to economic and industrial development in Africa. This project will provide infrastructure for the gateway port, which is connected with the hinterland countries through the Northern Corridor. The Northern Corridor is one of those five economic corridors and is the transport corridor linking the landlocked countries, i.e., Uganda, Rwanda, and Burundi with the Kenya’s maritime port of Mombasa. Similarly, the Northern Corridor serves Eastern part of the Democratic Republic of Congo, Southern Sudan and Northern Tanzania.

The Government of Japan also announced that it would support formulating 10 strategic master plans for urban planning, transportation, and infrastructure development in Africa. Regarding Kenya, in addition to formulating “Master Plan for Development of Mombasa Special Economic Zone”, JICA will support the formulation of “Comprehensive Development Master Plan in the Mombasa Gate City” and “Master Plan on Logistics in Northern Economic Corridor” soon. JICA is also currently implementing technical cooperation for strengthening the border customs functions through “Project on Capacity Development for International Trade Facilitation in the Eastern African Region”. In addition, JICA has supported road construction around the port area through the ODA loan project “Mombasa Port Area Road Development Project (MPARD)”, of which Loan Agreement was signed in June 2012. Through such inclusive support, good distribution has been stimulated not only in Kenya but also in the greater East Africa as well, contributing to economic development in the region.

Reference
1. Terms and Amounts of Loan

Project title Amount
(million yen)
Annual interest rate (%) Repayment
period
(years)
Grace
period
(years)
Procurement
Project Consulting services
Mombasa Port Development Project (Phase 2) 32,116 0.1 0.01 40 10 Tied

2. Executing Agency
Kenya Ports Authority
Address:Kenya Ports Authority
P.O. Box 95009-80104, Mombasa, Kenya
Phone:+254-41-211-2999

3. Planned Implementation Schedule
(i) Completion of project: June 2019 – when the facilities are put into service
(ii) Tender announcement of initial procurement package for international competitive bidding on project construction:
Procurement package title: Construction for Civil Work and Building (Package 1)
Release date: November 2015

4. JICA Contact Information
For further information about the procurement schedule, please contact the party listed below.
Contact Point for Infrastructure Sector, JICA Kenya Office
Address: The Rahimtulla Tower, 10th & 11th floor, Upper Hill Road, Nairobi, Kenya
(P.O. Box 50572-00200, Nairobi, Kenya)
Phone: +254-20-2775000

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