Legal & Regulatory Framework

Background /

Kenya has had private investments in her public infrastructure over the last 20 years, with some of the projects operational today. Most of these projects were however implemented without reference to any specific law and process. Some of the laws used then include the Privatization Act 2015, Public Procurement and Disposal Act 2005 and the Companies Act.

The process to harmonize the approach to private investment in the public infrastructure commenced with publication of the PPP Regulations under the Public Procurement and Disposal Act (PPDA 2005) in 2009.

The government then adopted the PPP Policy in 2011, to articulate its commitment to PPPs as a priority mechanism to address infrastructure budget shortfalls as well as to provide a basis for enactment of a primary law for delivery of PPPs.

2013 was a major watershed moment for Kenya as the year when the PPP Act was enacted. Predictably the existence of a clear and predictable legal basis to enter into PPP Agreements has catalyzed the ambitious Project Pipeline identified and currently under development.

The PPP Regulations were published in 2014 and provide detailed guidelines to the PPP Act for smooth implementation of the Act. 

You can download the relevant documents below;

  1. PPP Policy Statement 2011
  2. PPP Act 2013
  3. National PPP Regulations 2014
  4. Project Facilitation Fund (PFF) Regulations 2017

PPP Legal Framework in Kenya /

Kenya has a stable PPP Legal framework including the PPP Policy, PPP Act 2013 and PPP Regulations. This framework has been commended by both the private sector as well as various development partners as keeping with global best practice and supportive of the PPP agenda.

PPP POLICY /

Adopted in 2011, the PPP Policy articulates the government’s commitment to Public Private Partnerships (PPPs) as a priority mechanism to address infrastructure budgetary deficits and tap into private sector efficiencies in developing and maintaining infrastructure. The PPP Policy also provided the basis for enactment of the PPP Act 2013.

The PPP policy espouses for the following,

  1. Goals and benefits of PPPs to the country
  2. Provides foundation for institutions to support PPP agenda
  3. Provides for mobilization of domestic and international private finance
  4. Discusses range of government support to PPP Projects
  5. Establishes clear mechanism for project origination, development and execution.
  6. Articulates mechanisms for stakeholder engagement in delivery of PPP Projects.

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The overall objective of the IFPPP project is to increase private sector investment in the Kenyan infrastructure market.

PPP Act 2013 /

The PPP Act 2013 is the primary law on PPPs in the country. The law provides both a clear legal process of undertaking PPP projects as well as provide the institutional framework to support delivery of PPP projects. The PPP Act among other aspects,

  1. Defines PPPs, their scope and types of PPP arrangements recognized
  2. Provides a clear process for identification, prioritization, conceptualization, development, procurement, negotiations, award, approval, execution, monitoring and evaluation of operations phase and eventual hand over to government where this is applicable.
  3. Establishes the various institutions in-charge of policy direction on PPPs, championing and technical support on PPPs, development of projects at Contracting Authority level and determination on any petitions arising from procurement of PPP projects.
  4. Provides for financial security instruments to support PPP projects among them Letters of Support and Political Risk Guarantees.
  5. Establishes a Project Facilitation Fund (PFF) to support development of projects provide Viability Gap Funding (VGF) as may be required by some projects as well as meeting any contingent liabilities that may arise from PPP Projects which have been implemented.

PPP Regulations /

The PPP Regulations 2014 are meant to provide clarity to the spirit of the law in the following two key ways;

  1. Providing details on how projects will be prepared, tendered, approved and implemented.
  2. Providing details on the roles and responsibilities of parties involved in the PPP Transactions.

PPP Act 2013 /

The PPP Act 2013 is the primary law on PPPs in the country. The law provides both a clear legal process of undertaking PPP projects as well as provide the institutional framework to support delivery of PPP projects. The PPP Act among other aspects,

  1. Defines PPPs, their scope and types of PPP arrangements recognized
  2. Provides a clear process for identification, prioritization, conceptualization, development, procurement, negotiations, award, approval, execution, monitoring and evaluation of operations phase and eventual hand over to government where this is applicable.
  3. Establishes the various institutions in-charge of policy direction on PPPs, championing and technical support on PPPs, development of projects at Contracting Authority level and determination on any petitions arising from procurement of PPP projects.
  4. Provides for financial security instruments to support PPP projects among them Letters of Support and Political Risk Guarantees.
  5. Establishes a Project Facilitation Fund (PFF) to support development of projects provide Viability Gap Funding (VGF) as may be required by some projects as well as meeting any contingent liabilities that may arise from PPP Projects which have been implemented.

PPP Regulations /

The PPP Regulations 2014 are meant to provide clarity to the spirit of the law in the following two key ways;

  1. Providing details on how projects will be prepared, tendered, approved and implemented.
  2. Providing details on the roles and responsibilities of parties involved in the PPP Transactions.