Kenya has said it will allocate $155 million from proceeds of its pipeline IPO to support the expansion of Jomo Kenyatta International Airport in Nairobi.
President William Ruto said in a statement on Monday that between 15 billion and 20 billion Kenyan shillings ($116 million to $155 million) will be used for the airport expansion.
The government reported that it recently raised 106.3 billion Kenyan shillings, about $823 million, after selling a 65% stake in Kenya Pipeline Company through a public share offering.
Ruto said the funding will come through the National Infrastructure Fund, a financing framework created to mobilise capital for key national development projects.
“The expansion of the Jomo Kenyatta International Airport will be the first major project financed through this new model of financing under the National Infrastructure Fund,” Ruto said.
“Between 15 and 20 billion shillings from the National Infrastructure Fund, from the proceeds of the Kenya pipeline IPO will go to financing the seed money for the expansion of Jomo Kenyatta International Airport,” he added.
The airport expansion forms part of wider government plans to improve transport infrastructure and support economic activity across the country.
Jomo Kenyatta International Airport serves as the main aviation gateway to Kenya and is one of the busiest airports in East Africa.
Government officials have stated that passenger traffic and cargo volumes at the facility have grown steadily, placing pressure on the existing infrastructure.
Authorities alos said the airport is operating beyond its current capacity, creating the need for upgrades and modernisation of its terminals and supporting facilities.
Why Kenya plans to expand Jomo Kenyatta International Airport
The government said the expansion of Jomo Kenyatta International Airport is necessary to address increasing passenger demand and strengthen Kenya’s role as a regional aviation hub.
Located in Nairobi, the airport handles both domestic and international flights and connects East Africa to destinations across Europe, Asia and the Middle East.
Passenger growth and rising cargo shipments have stretched existing airport infrastructure, leading authorities to prioritise expansion works. Improving airport capacity is also expected to support trade, tourism and logistics services in Kenya and neighbouring countries.
Moreover, the government sees the upgrade as a way to improve operational efficiency and reduce congestion at the facility.
Officials indicated that expanding terminal capacity and modernising airport systems will allow the airport to handle larger volumes of travellers and freight.
How the pipeline IPO will support infrastructure funding
Kenya’s decision to sell shares in Kenya Pipeline Company is part of a broader strategy to mobilise domestic capital for national developments projects.
The government reported that proceeds from share’s sale will be directed towards infrastructure such as highways, railways, ports and aviation facilities.
In addition officials explained that the National Infrastructure Fund allows the state to pool financial resources for priority projects. The IPO proceeds therefore serve as initial capital to begin work on the airport expansion before additional funding sources are secured.
Beyond this project, authorities indicated that the financing models could support other infrastructure developments across the country.
The government stated that improved infrastructure will strengthen economic growth by supporting trade networks, transport links and investment activity.
In short, the planned airport expansion represents one of the first projects to be finalised through the Naional Infrastructure Fund using proceeds raised from the Pipeline Company share offering.
