Private Investor to Inject Sh12.5 Billion into Galana-Kulalu Food Security Project

Nairobi, Kenya – In a significant stride towards enhancing national food security, the Kenya Kwanza administration has announced a substantial investment in the long-troubled Galana-Kulalu project. Selu Limited, a special-purpose vehicle, has been awarded 20,000 acres under a Public-Private Partnership (PPP) deal, with plans to invest Sh12.5 billion to revitalize the initiative.

The National Treasury’s Draft 2024 Budget Policy Statement outlines this investment as part of a broader strategy to mobilize Sh64.5 billion from three key PPP projects by June this year. The Galana-Kulalu project is expected to contribute significantly to this figure, alongside the 35MW Orpower Geothermal Project and Africa 50 transmission lines.

Selu Limited’s involvement aims to transform the agricultural landscape by producing 720,000 bags of maize and 160,000 bags of soybeans annually over the next 30 years on the allocated land. This partnership represents a new chapter for the project, which has been marred by setbacks since its inception in 2013 under the Jubilee government.

The project’s history includes a notable fallout with Israeli contractor Green Arava in 2020, who left after disputes over payment despite receiving Sh5.9 billion from a Sh6.35 billion loan. Despite this, the government maintains that the taxpayers’ investment was not squandered, emphasizing that substantial groundwork had been completed on a 10,000-acre model farm.

However, the model farm’s productivity has been underwhelming, with only 119,000 90-kilogramme bags of maize produced in 2019, falling far short of the projected Sh1.2 billion per season in sales. This discrepancy has fueled skepticism regarding the project’s feasibility and cost-effectiveness.

The Galana-Kulalu Food Security Project, spanning across Tana River and Kilifi counties, is seen as crucial for addressing Kenya’s chronic food insecurity. By leveraging private investment and expertise, the government hopes to bridge the gap between food production and consumption, thereby reducing hunger among millions of Kenyans.

This latest development marks a pivotal moment for the project, aiming not only to improve agricultural output but also to restore confidence in one of Kenya’s most ambitious food security schemes. The success of this venture could set a precedent for future PPP initiatives in the country, emphasizing the potential of strategic partnerships in overcoming infrastructural and operational challenges in public projects.