[ACCI-CAVIE] The European Union said Tuesday February 21, 2023 that it would increase its investments in Kenya by hundreds of millions of dollars, looking to bolster ties in the face of competition from China.
The deals will unlock “untapped potential to be uncovered and exploited,” the EU ambassador to Kenya, Henriette Geiger, said at the start of a two-day business forum in the Kenyan capital Nairobi.
The agreements include a $200 million pledge by the European Investment Bank to help the Trade and Development Bank, run by several African states, support companies in eastern and southern Africa affected by the war in Ukraine.
Africa has become a diplomatic battleground between Russia and the West since the invasion of Ukraine, with the EU also taking steps to counter China’s Belt and Road initiative to fund infrastructure projects in developing nations.
Geiger said the new deals are part of the EU’s Global Gateway initiative, which seeks to mobilise up to $340 billion to support public and private infrastructure ventures around the world by 2027.
“This strategy is a template how Europe can build more resilient connections with the world to tackle the most pressing global challenges,” she said.
An economic powerhouse of east Africa, Kenya is seen by the international community as a reliable and stable democracy in a turbulent region.
Currently, the EU is the largest export destination for Kenyan products, including flowers, and Kenya’s third-largest source of imports.
France’s Trade Minister Olivier Becht, who attended the conference, told AFP that his country would contribute 30 million euros ($32 million) for the construction of eight sports facilities in Kenya.
“There is a part for every investor who wants to participate in Kenya’s economic growth,” Becht said. “It is not a competition between French companies or Chinese companies to do more.”
Kenya’s biggest infrastructure project, a $5 billion railway line connecting Nairobi to the port city of Mombasa, which opened in 2017, was built by a Chinese company with Chinese financing.
In 2020, a French consortium won a 1.6 billion euro deal to build and operate a highway linking Nairobi and Mau Summit in western Kenya, but the project was halted by Kenyan President William Ruto last year over toll fees, according to media reports.
Becht said he discussed the project with Ruto on Tuesday, adding that further talks were expected, but he declined to provide specifics.
“Kenya seeks a win-win relationship that drives economic growth,” Ruto said on Twitter after the meeting. “Our relations with France are anchored on this principle across trade, energy, health and infrastructure.”
The EU last year invited 40 African leaders to Brussels for a two-day summit aimed at rebooting ties through investment.
By AFP and LB