Nine Kenyan pension plans have formed a coalition to invest in local infrastructure, private equity and real estate in deals structured to also potentially include direct investment by international asset owners and managers.
The first project under consideration is a $2 billion toll road in Kenya — the Nairobi-Nakuru-Mau Summit Highway — that is being supported by guarantees from the World Bank. The consortium would invest a combined equivalent of $70 million in local currency to the project once the contract is awarded.
Three groups are on the Kenya National Highways Authority's shortlist to build the project, an expansion of a 180-kilometer road into a four-lane highway. The authority could make a selection any time now, according to people close to the process.
The consortium would make a relatively small investment in local currency, acknowledged Sundeep Raichura, Nairobi-based group CEO of pension plan administrator Zamara Actuaries, Administrators & Consultants Ltd., who has helped to create the consortium. The nine pension plans have entered into an agreement to work together, but Mr. Raichura added other local pension plans are interested. The group could expand to 15 members with combined total assets of $2 billion, he said.
The goal is that additional financing, in dollars or euros, would come from another consortium of U.S. and European asset owners, he said.
"The project would be financed with a combination of equity financing from the project sponsor, foreign and local currency debt, and also guarantees from the World Bank to mitigate the risk," Mr. Raichura said.