Kenya has officially terminated a €1.3 billion (approximately Ksh.190.8 billion) highway expansion deal with a French-led consortium, opting instead to award the contract to a yet-to-be-named Chinese company. The move marks a major shift in the financing and construction of a key national infrastructure project, which aims to upgrade the 140-kilometre Nairobi-Nakuru highway into a multi-lane road.
The initial agreement, signed in Paris in 2020 during former President Uhuru Kenyatta’s administration, involved French infrastructure giant Vinci SA and private equity firm Meridiam SAS. The project was structured as a public-private partnership (PPP), under which the French consortium would finance, build, and operate the road.
However, the Kenya National Highways Authority (KeNHA) has confirmed that the government decided to review the terms of the agreement, citing concerns about the financial risks placed on the state. Specifically, the deal reportedly transferred the burden of low traffic volumes — and the resulting loss in toll revenues — onto the government, a clause KeNHA deemed unfavorable.
“KeNHA requested a restructuring of the contract … but the proposal was considered unbankable thus creating a stalemate,” the agency said in a statement. With construction work yet to begin, KeNHA subsequently issued a termination notice, effectively ending the deal.
French firm Vinci has declined to comment on the termination, while Meridiam has not responded to media inquiries.
Sources close to the Kenyan government indicate that the project is now being handed over to a Chinese contractor, though details remain undisclosed. This pivot towards China comes as senior Kenyan officials, led by Finance Minister John Mbadi, visited Beijing earlier this month for high-level meetings. Reports also suggest that President William Ruto is planning a state visit to China later this month.
The Nairobi-Nakuru highway is a vital transport corridor connecting Kenya’s capital to the Rift Valley region, and its expansion is expected to ease congestion, enhance trade, and improve road safety. The shift in contractors underscores Kenya’s evolving diplomatic and financial priorities as it seeks reliable partners for its ambitious infrastructure agenda.
