In a strategic pivot, the Kenyan government has turned to the Kenya Airports Authority (KAA) to help fund the construction of a new airport after a much-publicized partnership with India’s Adani Group fell through. The Transport Cabinet Secretary Davis Chirchir announced the shift, emphasizing that public infrastructure projects should not be financed at the expense of essential social services such as healthcare, education, and food security. Speaking at the Jomo Kenyatta International Airport (JKIA) during the signing of a Customer Service Charter, Chirchir noted that the government intends to submit a proposal to the Cabinet outlining how KAA’s balance sheet will be leveraged to attract development financing.
KAA, the State corporation responsible for managing Kenya’s airports, is still reeling from financial strains incurred after the termination of the JKIA Greenfield Terminal project in 2017, which left the authority saddled with debt exceeding Sh4 billion. Despite this, KAA’s asset base has seen remarkable growth, boasting assets valued at over Sh1.1 trillion as of June 2023 a sharp increase from Sh73.3 billion the previous year, largely due to a revaluation of land holdings. This solid financial standing has positioned KAA as a potential anchor for financing the proposed airport through collaborations with global development finance institutions like the Export-Import Bank and Export Credit Bank.
Chirchir asserted that funding large-scale infrastructure through self-sustaining entities like KAA is more fiscally responsible, given the government’s limited fiscal headroom. He underscored that diverting funds from revenue-generating investments to cover social infrastructure could stifle progress in sectors like education and health. The Cabinet has already acknowledged this approach, signaling support for a model that allows investments with the capacity to service their own debts to proceed independently, without crowding out vital public services.
Accompanying Chirchir during the JKIA event were Interior Cabinet Secretary Kipchumba Murkomen, Tourism Cabinet Secretary Rebecca Miano, Principal Secretary in the State Department for Transport Mohammed Daghar, and Inspector General of Police Douglas Kanja. Their presence highlighted the multi-agency cooperation involved in improving airport services and the broader aviation infrastructure in the country. The recently signed Customer Service Charter aims to enhance the passenger experience at JKIA through immediate infrastructural improvements such as a modernized baggage handling system, upgraded drainage, enhanced air conditioning, and better signage.
KAA’s financial recovery remains a focal point. The authority reported a net loss of Sh474 million for the fiscal year ending June 2023, primarily linked to the cancellation of the greenfield terminal project, which resulted in a write-off of Sh4.6 billion. Despite this setback, the acting chief executive of KAA, Henry Ogoye, expressed optimism about the authority’s ability to procure a new terminal to expand JKIA’s capacity and solidify its status as East Africa’s aviation hub. Furthermore, the Customer Service Charter brings together critical agencies such as the Directorate of Immigration Services, Kenya Revenue Authority, Customs, and the Kenya Airports Police Unit, aiming to streamline services and achieve Kenya’s tourism goal of five million annual visitors by 2027, up from the current 2.4 million.
