East African leaders have resolved to present a financing proposal for the Lamu Port Southern Sudan-Ethiopia Project (LAPSSET) to potential financiers at the US-Africa Summit in Washington DC next week.
In a communiqué issued after a meeting in Nairobi Thursday, Heads of State of Kenya, Uganda, Ethiopia and South Sudan, agreed to explore the potential of funding from US companies. They also agreed to maintain rich Gulf States as potential financiers of the project.
“Our discussion was especially informed by the upcoming Africa-USA Summit on 4-7 August 2014 that will allow the leaders a chance to engage with American investors on this project,” said a statement issued by the office of Kenyan President Uhuru Kenyatta.
Ugandan President Yoweri Museveni, Ethiopian Prime Minister Hailemariam Desalegn and South Sudanese President Salva Kiir, attended a Summit on the project, which involves construction of a highway, port and an oil refinery to boost regional trade and improve transport across the region.
“Our meeting was the latest chapter in a deepening integration agenda that is focused on opening up the region to trade and investment and ensuring that its enterprises are globally competitive,” President Kenyatta said.
The LAPSSET project, a combination of projects, which include the construction of the Port of Lamu, oil refineries and resort towns, require an estimated budget of US$24.5 billion.
Lamu Port alone with its 32 projected berths alone will cost US$3.1 billion.
The leaders discussed how to access additional funds for the project, including the possibility of getting funds from the African Development Bank’s Africa50 Infrastructure Fund.
They also discussed “how our joint efforts can help make a compelling business case to private sector players.”
“With the large sums involved, it was clear to us that a joint approach that is innovative will be required for implementation. At length, we explored the complexities of shortening the period between project conceptualisation and the realisation of a sustainable financial model that will deliver implementation,” stated the communiqué.
They said the decision to seek funding from US firms was a continuation of similar engagements that are being held with investors from across the Middle East and the Indian Ocean Rim.
LAPSSET project aims to facilitate access to sea for oil exports from South Sudan and Uganda by offering a new refinery and oil pipelines. Regional highways to improve movement of goods also back it.
The leaders said the project would support regional economic integration and interconnectivity and generate investment and trade flows, which is crucial to economic prosperity and job creation.