Kenya receives Adani proposal to invest in its biggest airport

Kenya’s government received a proposal from Adani Airport Holdings Ltd. to invest in the nation’s main airfield, the Kenya Airports Authority said.

Indian billionaire Gautam Adani’s company offered to help build a new passenger terminal and second runway at the Jomo Kenyatta International Airport in the capital, Nairobi, as well as refurbish existing facilities, KAA acting Managing Director Henry Ogoye said in a statement on Wednesday. The proposal will be subjected to technical, financial and legal reviews to ensure it complies with the nation’s public-private partnerships laws, he said.

Ogoye made the announcement after lawmaker Richard Onyonka petitioned parliament to scrutinize a build-operate-transfer agreement with the Kenyan government. The Organized Crime and Corruption Reporting Project on Wednesday questioned why the Kenyan authorities are considering a private proposal after experts advised the government earlier this year to put out a public tender for the project.

The KAA referred a request for comment on the OCCRP report to Prime Cabinet Secretary Musalia Mudavadi’s office, which didn’t immediately respond to queries. 

Kenya has previously refurbished and expanded its main airport and has had plans for a second runaway in an effort to retain its status as a regional aviation hub. Neighboring Ethiopia, which operates Africa’s biggest airplane fleet, has chipped away at that dominance in recent years.

An estimated $1.85 billion of spending is required to address “challenges” identified at the airport, about $830 million of which would be required in the first five years of a proposed upgrade project, according to the Adani proposal. The investment required is “significant and cannot be funded with the prevailing fiscal constraints without recourse to private funding,” the company said.

Adani Airport notes the statement issued by the KAA and has no further comment, a spokesperson said in response to a request for comment.

The company, controlled by Asia’s second-richest person, has a portfolio of eight airports dominating more than 50% of the top 10 Indian domestic routes. The airports account for 23% of Indian air traffic serving 20% of total passenger base.