The pan-African lender last week gave a $1.9 million (about Sh194.86 million) grant to cater for advisory services and technical support in developing a feasible plan for the port.
The funds, through AfDB’s New Partnership for Africa’s Development Infrastructure Project Preparation Facility, will position the proposed Lamu port as an attractive venture for big-ticket investors.
The port has 32 berths whose construction cost is estimated at $5 billion (Sh512.8 billion). The cost for the first phase of the project’s three berths is estimated at $689 million (Sh70.7 billion). The amount will cover dredging and reclamation, construction of berths and yards, construction of revetment, causeway and road, construction of buildings and utilities, and procurement of equipment and tug boats among others.
The construction of the first three berths is being funded by the government, while the remaining 29 will be financed through public-private partnerships under the build-operate-transfer model.
“The construction of the first three berths is ongoing with completion date of July 2018 for the first berth, and December 2020 for the next two at a cost of $480 million (Sh49.2 billion),” AfBD and Lapsset Corridor Development Authority said in a joint statement.
The proposed port is the core of the Sh2.5 trillion Lamu Port Southern Sudan- Ethiopia Transport Corridor, whose implementation has suffered funding challenges since its commissioning on March 2, 2012.
The government is, however, calling on the private sector to fund the project, which will see the country have a second major sea port at Lamu.
“Lamu Port has an economic internal rate of return for the long-term development plan of 23.4 per cent,” Lapsset authority CEO Silvester Kasuku told the Star in an interview.
“The projected demand forecast for freight and passengers for the years 2020 and 2030 illustrate that the total dry cargo throughput at Lamu port would be 13.5 million tonnes by 2020, and 23.9 million tonnes by 2030.”
The authority hopes to lease the first berth to the private sector by the end of 2018.
The construction of the port headquarters and port police station are complete. Electric power connection to the national grid and water reticulation networks are also in place.