Kenya’s $1.2bn port plan advances Mombasa-Lamu concessions

By James Calloway

Kenya’s National Treasury expects KSh151.9bn (nearly $1.2bn) in private investment from a two-phase port-privatisation programme covering operations at Mombasa and Lamu. The first package of concessions has a stated value of KSh79.69bn ($615m), while the government is preparing a second package valued at approximately KSh80bn.

The Kenya Ports Authority is expected to contribute KSh7.79bn ($60m) to the first package alongside private investors. The authority will retain ownership and regulatory oversight, but private terminal companies will finance equipment, infrastructure improvements and terminal operations under the landlord port model.

The government has approved the feasibility studies for the first package, clearing KPA to proceed with competitive procurement. No concession awards have been announced, so no private operator has yet been selected for any listed asset.

What does the first concession package cover?

The first package spans container assets at both ports and the special economic zone beside Lamu:

• Mombasa berths 11 to 14.
• Mombasa Container Terminal 1.
• Lamu Container Terminal berths 1 to 3.
• The adjoining Lamu Special Economic Zone.

The scope brings together Mombasa berths, a container terminal, Lamu container berths and an adjoining zone. Each asset would sit within a concession structure in which a private operator supplies equipment, infrastructure improvements and terminal operations.

What is being prepared in phase two?

A second package, estimated at approximately KSh80bn, is also being prepared. It would add more Mombasa container terminals and general-cargo terminals, Mbaraki Wharf, and inland container depots at Embakasi and Naivasha.

The proposed second phase would broaden the programme beyond the berths and terminals in package one. Mbaraki Wharf and the Embakasi and Naivasha depots would join the concession perimeter, giving forwarders and cargo customers a broader set of assets through which future operating arrangements could be delivered.

How much capacity is at stake?

At Mombasa, redevelopment of berths 11 to 14 could increase annual container capacity from approximately 300,000 TEU to 900,000 TEU, roughly tripling the stated baseline. Dredging and berth realignment would also allow larger vessels to call.

For shippers, the practical benefit is more prospective berth capacity at Mombasa and, potentially, more choices in the vessels able to serve it. For ocean carriers, dredging and realignment matter because the work directly affects vessel access.

Neither benefit becomes operational merely because the Treasury has published an investment total. Procurement, awards and physical works still stand between the plan and usable capacity.

Lamu’s first three berths have a combined design capacity of 1.2 million TEU. That is a design figure rather than a stated throughput forecast, and the disclosed programme details include no committed vessel calls, cargo volumes or opening schedule. Even so, it gives the two-port programme substantial capacity scale alongside the planned expansion at Mombasa.

Who carries the investment and operating risk?

Under the landlord port model, KPA retains ownership and regulatory oversight while private operators finance equipment, infrastructure upgrades and day-to-day terminal operations. For the authority, that means capital delivery and operating activity move into concession contracts; for investors, it means taking on terminal operations as well as supplying the assets’ equipment and infrastructure.

For cargo customers, the outcome depends on the commercial terms attached to each concession. Capacity at Mombasa could support greater vessel and cargo options, while phase-two inclusion of Mbaraki and inland depots could reshape how forwarders organise port-to-inland flows.

Those effects remain unquantified because the programme disclosure specifies no rates, service standards or operator performance commitments. Shippers cannot yet treat the planned capacity as a guaranteed commercial improvement.

What happens next?

The next milestones are KPA’s competitive procurement for phase one, selection of concessionaires and further preparation of the KSh80bn second package. Until those steps produce operators and physical improvements, the planned 900,000 TEU at Mombasa berths 11 to 14 and 1.2 million TEU design capacity at Lamu will remain planned rather than operating capacity.

Any freight-rate effect likewise remains unquantified. Shippers and carriers should watch competitive tenders and operator awards: the programme can add capacity and larger-vessel access, but those gains will translate into services only as the concessions take effect and the berth, dredging and terminal works are completed.