Africa’s infrastructure gap is usually described as a shortage of roads. More precisely, it is a shortage of bankable roads: projects structured so that private and institutional money will carry part of the cost and part of the risk. On 23 May 2024 Kenya put that distinction to the test. The Kenya National Highways Authority and the investment manager Everstrong Capital said they had agreed to develop a 440-kilometre Nairobi-Mombasa expressway at a stated US$3.6bn, using a blended pool of international and domestic capital. For a finance reader the story is the capital stack, not the tarmac, and whether it can be assembled on terms that hold.

Follow the Money: What Blended Capital Signals

A blended pool means the funding is not one instrument but several, combining international and domestic sources at different points on the risk-return ladder. The intent is to make a nationally critical asset investable without placing the whole burden on the Kenyan sovereign balance sheet. That matters at a moment when the National Treasury is managing debt carefully and every large commitment is measured against fiscal space. The involvement of an investment manager rather than a single contractor points toward a financing-led structure, in which returns are engineered from the asset’s cash flows over its life rather than paid out of the budget in a single lump. It also implies a longer horizon: equity investors in a road expect to be repaid over decades of use, which only works if the traffic and the tolling or payment mechanism behind it are credible from the outset.

The takeaway: the model is designed to fund the road off its own revenues, not the Treasury’s.

Who Carries the Risk: Traffic, Currency and Repayment

Every road financed this way rests on assumptions that can fail. The first is traffic: the revenue case depends on freight and vehicle volumes on the Northern Corridor holding up, whether monetised through tolls or availability payments from the state, and a shortfall against forecast is the classic way infrastructure finance disappoints. The second is currency. Costs and much of the capital are likely in US dollars while corridor revenues are earned in shillings, so a weaker KES can widen the gap between what the asset earns and what it owes, a mismatch that has stranded more than one African project. The third is repayment structure: the tenor and seniority that decide who is paid first if volumes disappoint, and who absorbs the loss. These are the questions that determine whether US$3.6bn is a sound investment or a stranded one.

The takeaway: bankability turns on traffic, currency and the order of repayment.

The Local Stack: Can Kenyan Institutions Get In

A blended structure raises a domestic opportunity. Kenya has pension funds, insurers and banks that need long-duration, shilling-denominated assets to match their long-dated liabilities, and a corridor with predictable cash flows is, in principle, a natural fit. Whether local institutions can enter the capital stack depends on the instruments offered: listed infrastructure bonds, direct equity or fund vehicles that suit their mandates and their regulatory limits. If domestic capital can take a meaningful tranche, the country keeps more of the returns and reduces its currency exposure, because a shilling-funded portion earns and repays in the same unit the road collects. If not, the blend tilts foreign, and so do the profits and the exchange-rate risk that comes with them.

The takeaway: the depth of local participation decides how much of the value stays in Kenya.

So What: Read the Term Sheet Before the Ribbon

For an African operator or allocator, the decision on 23 May 2024 is to withhold judgement until the structure is visible. The signal to watch is not the groundbreaking but the financing terms: the mix of international and domestic capital, the currency of the revenues against the debt, the repayment waterfall, and whether Kenyan institutions are given a real place in the stack. Those terms, more than the US$3.6bn headline, will tell you whether this corridor is a template worth copying across the region, or a deal that looks better in the announcement than on the term sheet.