Infrastructure investments in low- and middle-income countries continued to rebound in the year ending December 2022, according to World Bank’s latest data outlook on investment released this week.
The report shows Private Participation in Infrastructure (PPI) commitments reached $91.7 billion (Sh12.4 trillion) across 263 projects, marking a 23 per cent increase from 2021.
“The total number of projects, however, is still below pre-pandemic levels,” World Bank says.
While the trends suggest an overall recovery, the lender says investments were concentrated and uneven across different regions.
Sub-Saharan Africa for instance, saw a 15 per cent decrease in investments compared to the past five-year average.
Nevertheless, the number of projects and countries in the region with PPI transactions were the highest in the past decade.
In Kenya, there are about 45 PPP projects currently under implementation, or in active operation, six of which are road projects totalling 639km under the roads annuity and tolling programmes.
Another 39 are electricity generation projects totalling 3,034 megawatts of installed capacity.
Originally, road tolls were introduced in the country in the late 1980s but were scrapped mid-1990s in favour of the Roads Maintenance Levy to eliminate corruption at toll stations.
The levy is currently charging motorists Sh18 per litre from the purchase of petrol and diesel respectively.
Highlighting the world’s poorest countries, 18 which are members of the International Development Association (IDA), the lender says they received investment commitments amounting to $4.7 billion (Sh639.2 billion) across 30 projects in the period under review.
“This represents more than a 26 per cent increase in investment levels compared to 2021, but also a 22 per cent lower investment level than the past five-year average of $6.1 billion (Sh829.6 billion),” World Bank adds.
IDA is an international financial institution under the World Bank, that offers concessional loans and grants to the world’s poorest developing countries.
The transport sector continued to lead the sustained recovery in developing nations into 2022, outpacing other sectors significantly.
At $66.2 billion (Sh9 trillion) in PPI investment across 85 projects, transport comprised about 68 per cent of the total 2022 PPI investment.
“This is explained by more investment in roads, which have historically been the largest sub-sector in transport commitments,” the lender says.
The energy sector also gained a significant share of PPI investment in the period under review, with about 21 per cent increase for a total of $25.9 billion (Sh3.5 trillion).
Investments were increasingly focused on environmentally sustainable options, with about 85 per cent of new energy projects being in renewable energy, compared to an average of 63 per cent over the last five years.
Comparing the investment levels to other regions, Latin America and the Caribbean, East Asia and the Pacific recorded an increase in PPI commitments, with increases of 16 and 17 per cent, respectively.
South Asia received $13.9 billion (Sh1.8 trillion) in private sector investments, the highest in the past 10 years and over 15 per cent of total global commitments.
Europe and Central Asia saw the lowest private investment commitments in the past decade.
The downturn is mainly due to Russia’s invasion of Ukraine, with neither country reporting any PPI projects for the first time in five years.
Source: The Star Kenya