Grand Kenya box port faces money troubles as well as regional jealousies
BOUYED by oil finds in Kenya and Uganda and a ready supply from South Sudan, plans are afoot to build a major oil and container port at Lamu, 300 kilometres north of Mombasa, Reuters reports.
But financing is slow. Experts say the Lamu port is viable. South African banks are interested, but emerging markets face hard times raising cash. While China has a US$470 million contract for Lamu port's first three berths, its commitment is tiny compared to its backing for Tanzania's US$10 billion rival Bagamoyo port plan.
Kenya must shore up regional commitment for the US$25.5 billion Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) plan that by 2030 envisages a port, new roads, a railway and pipeline.
Success would bolster Kenya's primacy as east Africa's maritime gateway because it would offer unmatched economies of scale for undeveloped oil regions that promise to deliver 500,000 barrels per day from Kenya and Uganda alone.
But Kenya's virtual monopoly on trade through Mombasa arouses bad feelings among neighbours. "The big obstacle is political, making sure discussions that need to happen, happen," said Eurasia Group analyst Clare Allenson.
Uganda did agree to ship its future oil output by pipeline to Lamu from the outside, but then British explorer Tullow Oil increased Kenya's oil reserve estimates and said it would be east Africa's biggest by 2016.
South Sudan has suggested that a new pipeline, warranted if new oil is found, to run through Ethiopia to Djibouti. It frequently has trouble getting it through Sudan, and dealing with its old rulers in Khartoum and wises to be free of that dependence.
The World Bank, African Development Bank and European Union are funding roads linking Kenya with South Sudan and Ethiopia. Though this could help the Lamu project, these donors and concessionary lenders are not directly funding the core project.
BOUYED by oil finds in Kenya and Uganda and a ready supply from South Sudan, plans are afoot to build a major oil and container port at Lamu, 300 kilometres north of Mombasa, Reuters reports.
But financing is slow. Experts say the Lamu port is viable. South African banks are interested, but emerging markets face hard times raising cash. While China has a US$470 million contract for Lamu port's first three berths, its commitment is tiny compared to its backing for Tanzania's US$10 billion rival Bagamoyo port plan.
Kenya must shore up regional commitment for the US$25.5 billion Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) plan that by 2030 envisages a port, new roads, a railway and pipeline.
Success would bolster Kenya's primacy as east Africa's maritime gateway because it would offer unmatched economies of scale for undeveloped oil regions that promise to deliver 500,000 barrels per day from Kenya and Uganda alone.
But Kenya's virtual monopoly on trade through Mombasa arouses bad feelings among neighbours. "The big obstacle is political, making sure discussions that need to happen, happen," said Eurasia Group analyst Clare Allenson.
Uganda did agree to ship its future oil output by pipeline to Lamu from the outside, but then British explorer Tullow Oil increased Kenya's oil reserve estimates and said it would be east Africa's biggest by 2016.
South Sudan has suggested that a new pipeline, warranted if new oil is found, to run through Ethiopia to Djibouti. It frequently has trouble getting it through Sudan, and dealing with its old rulers in Khartoum and wises to be free of that dependence.
The World Bank, African Development Bank and European Union are funding roads linking Kenya with South Sudan and Ethiopia. Though this could help the Lamu project, these donors and concessionary lenders are not directly funding the core project.