Standard Bank joins the K34.5bln Kenyatta-Mzimba road development
Malawi Government has hailed Standard Bank of Malawi Plc for partnering with it towards improvement of Lilongwe’s transport network after signing a K34.5 billion investment towards rehabilitation of Kenyatta and Mzimba road network
This is the largest local-currency financed arrangement with government to turn the Kenyatta-Mzimba road into Malawi’s first ever 6-lane highway.
The deal was signed on Thursday in Lilongwe by Standard Bank and Minister of Finance, Sosten Gwengwe, who hailed Standard Bank for leading the private sector to facilitate economic transformation through financing of Malawi’s transport and infrastructure.
The agreement binds the Roads Fund Administration (RFA) as project implementer and Standard Bank Plc as the lead financier and joint arrangers, Old Mutual and Continental Asset Management as co-financiers.
“The Government of Malawi would like to recognize Standard Bank, Old Mutual and Continental Asset Management — in their respective rights as co-financiers —for financing Malawi’s development agenda,” said the Minister.
“The upgrade of the Kenyatta Drive and Mzimba Street is a fulfilment of the MW2063 Pillars 9 and 2, which state that Malawi will build resilient infrastructure, promote sustainable industrialisation, promote innovation as well as develop low cost and competitive transport systems across all modes.
“Completion of the upgrades will lead to the decongesting of traffic and accelerate movement of people and goods in Malawi’s administrative capital,” Gwengwe said.
The financial agreement clears the way to accelerate substantive construction works for the road, which will become Malawi’s first six-lane road. Preparatory and other ground-breaking works for the project begun in 2021.
“As government, we value the role private sector plays in this economy and we will therefore continue to create an enabling environment to ensure that our private sector fully engages itself in the economic development of the country.
“This financing partnership between the RFA and the consortium of financiers, would not have materialized if the environment was not enabling enough for the private sector to participate.
“Let me encourage other private sector players to emulate what the consortium of financiers have done,” said the Minister.
As joint lead arranger, Standard Bank Malawi raised K21 billion for the road construction and Chief Executive Officer, Phillip Madinga said: “Our capability to finance a project of this stature highlights Standard Bank’s commitment to contribute to economic growth in line with our purpose, which is ‘Malawi is Our Home, We Drive her Growth’.
“The Bank has a desire to see the country achieve remarkable progress in key sectors such as roads and infrastructure.”
Old Mutual will contribute K11 billion and Continental Asset Management will invest K2.5 billion towards the project.
Old Mutual Group CEO, Edith Jiya said the investment and asset management firm shares the passion for the country to achieve sustainable economic growth and reduce poverty through infrastructure development as is case with the Kenyatta Drive.
“We take pride to be associated with projects that improve Malawi’s transport networks, leading to better interconnection of our cities and direct positive impact to our customers and our nation,” she said.
Continental Asset Management CEO, Gillian Kachikondo said the fund management firm has participated in the financing agreement on behalf of various pension funds under its care.
“Continental Asset Management is very excited to be part of this progressive project, which is expected to transform the city’s outlook and foster increased economic activity in line with Malawi Vision 2063,” she said.
RFA Chairman Matthews Chikankheni said the financing agreement demonstrates that it is possible for Malawi to undertake large and transformative infrastructure projects through public and private partnership.
“It would not have been possible for the RFA to raise this amount of resources from its internal sources without negatively affecting some of its other road works financing needs,” he said.
RFA will repay the funds over a 15-year period.
During the ground breaking ceremony in 2021, President Lazarus Chakwera said as a Capital City, Lilongwe deserves better attention and also disclosed that the government will launch rehabilitation works of the M1 Road with funding from development partners.
He said the upgrading of roads and implementation of many other projects will create more jobs for citizens, that will in turn empower them economically.
The ground breaking was done at Bingu International Convention Center (BICC) near Parliament roundabout — the junction for Kenyatta that passes through Bisnowaty past Tsoka market near Constantini to Shoprite in Area 3.
The President warned that justice will take its course for those involved in corrupt practices that derail development projects.
The upgrade works will include construction of an additional bridge along Lingadzi River and partial Clover Leaf Interchange to replace the roundabout at Kamuzu Central Hospital Petroda filling station, among many roads earmarked for construction and upgrading.
The project commenced September 2021 and the 3.9km road construction was supposed take 18 months and to be ready for use by February 2023 — all delayed amongst several factors that included CoVID-19 pandemic.
Mzimba road will be upgraded from Crossroads roundabout to Central Medical Stores. Other roads earmarked for upgrade that are included in the 2021/2022 budget were expansion to dual carriage way of the M1 Road from Kamuzu International Airport junction to Mzimba Turn-off.
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