NAIROBI (Reuters) – Kenya wants to involve private investors in plugging a gap of over $44 billion in funds needed to build new ports, roads and railways and to improve water and electricity supply over the next five to eight years, a senior finance ministry official said on Monday.

Construction workers erect a scaffolding on a tunnel along the Nairobi-Thika highway project, under construction near Kenya's capital Nairobi, September 23, 2011. REUTERS/Thomas Mukoya

Joseph Kinyua, permanent secretary at the Treasury, said a bill will go before parliament next month aimed at attracting private investors through streamlined contracts clarifying the legal basis for public-private partnerships.

Kenya has invested heavily in roads and power transmission since President Mwai Kibaki took office in late 2002, but much of the country is still without sufficient infrastructure. Businesses complain of inadequate roads to reach markets and frequent power cuts which slow down economic growth.

Kinyua told a meeting of government departments and private sector representatives that the Treasury would raise some funds for these projects from the private sector.

“It is currently estimated that there is a funding gap of approximately $44 billion that is needed to address the infrastructure requirements in the next five to eight years,” he said.

“The PPP (Public-Private Partnership) arrangements, therefore, offer an opportunity for Kenya to attract enhanced private sector participation in financing, building and operating infrastructure services and facilities in order to close this huge funding gap.”

Under a development plan – Vision 2030 – the government forecasts the economy to grow by 10 percent a year by 2030, the year in which it hopes to become a middle-income country, and it is banking on improving infrastructure to achieve this.

The government expects the economy to grow by 5 percent or more in 2012, up from an estimated 4.5 percent last year.

In its 2011/12 (July-June) fiscal budget, the government said it plans to raise 35.85 billion shillings in infrastructure bonds, up from 30.5 billion shillings the previous year.

The government is also in the process of getting a $600 million two-year syndicated international loan that the government says will be used for financing infrastructure, including ongoing road projects and new projects in the irrigation and energy sectors.

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