Lamu Port and Lamu–Southern Sudan–Ethiopia Transport Corridor

The Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project, also known as Lamu corridor, is a transport and infrastructure project in Kenya that, when complete, will be the country's second transport corridor. Kenya's other transport corridor is the Northern Corridor, which links Mombasa to Uganda, passing through Nairobi and much of the Northern Rift. Some basic LAPSSET infrastructure has been built (a police station and harbor office in Lamu and lengthening of the Lamu airport runway). The construction of LAPSSET's main components (ports, pipelines, roads, railways) is currently ongoing with construction of the first berth at Lamu Port completed in October 2019.See: , businessdailyafrica.com, Tuesday, 6 August 2019 11:23 Although the project is not formally stalled, its short to medium term goals are uncertain. Insecurity and political instability in Kenya are mostly to blame, as is the consideration of more commercially viable alternative pipeline options through Tanzania or Ethiopia. The low oil prices since 2015 also affect LAPSSET's commercial prospects.See: East Africa’s pipeline politics in 2016, Global Risk Insights, 15 January 2016.

As of 2025, insurgent attacks by the militant group Al-Shabaab (based out of Somalia) have stalled the project.

Background The aim of the project is to cut over-dependence on Kenya's main port of Mombasa as well as to open up Kenya's largely under-developed northern frontier through the creation of a second transport corridor.

Key towns in the project are Lamu and Isiolo in Kenya, Juba in South Sudan and Addis Ababa in Ethiopia.

The project was initially conceived in 1975 but never took off due to various reasons. The project was later revived and included in Kenya Vision 2030. In 2009, the cost of LAPSSET was estimated at US$16 billion. Estimates from 2015 put the cost of the project at between US$22 billion and US$23 billion. On 1 April 2013, Kenya's government announced the setting up of a government agency, the LAPSSET Corridor Development Authority (LCDA) to manage the project on behalf of the Kenyan government. The cost of the project was put at KSh.2.5 trillion/= (US$29.24 billion).

The timeline of the project is not clear, including when it started and when it will be completed. Some projects like the Isiolo-Merille projects began in 2007. It was estimated that, at the peak of the project between 2013 and 2018, the Kenyan government would spend about 6% of the country's Gross Domestic Product or 16% of its annual budget on the project. The project is in turn expected to contribute an additional 3% increase in Kenya's GDP by 2020.

LAPSSET Corridor projects The LAPSSET Corridor includes the following infrastructure projects: Lamu Port at Manda Bay (23 Berths including associated infrastructure) Standard gauge railway line from Lamu – Isiolo – South Sudan (Juba) – Ethiopia (Addis Ababa) Highways from Lamu – Isiolo – South Sudan (Juba) – Ethiopia (Addis Ababa) Crude oil pipeline from Lamu – Isiolo – Nakodok/Nadapal (South Sudan), and Product Oil Pipeline from Isiolo – Moyale – Addis Ababa (Ethiopia) International airports at Lamu, Isiolo, and Turkana (Lokichogio); Resort cities at Lamu, Isiolo and Lake Turkana Oil refinery at Isiolo. Services related infrastructure project components, namely; a. Malindi – Garsen road b. High Grand Falls multipurpose dam i. Water supply ii. Power supply; and c. Fibre optic cable / communication d. Other generated and attracted investments in commercial and manufacturing sectors along the LAPSSET Corridor.

In addition to this the project is also spearheading the development of associated infrastructure sub projects, in particular the High Grand Falls Power Station that is envisaged to produce 500MW of power and provide water to Lamu city, Lamu Port and metropolis, and irrigation of mega farms planned for the Tana Delta among other areas within the Corridor. The High Grand Falls will be used to create a manmade lake at its dam with a view to controlling perennial flooding within the lower Tana Basin. More importantly, the LAPSSET Corridor infrastructure is being developed as a critical enabler meant to spur growth of other sectors of the economy within the Corridor. Of great significance is the rich agricultural value chain, spanning over ten different economic crops whose implementation has begun with the establishment of mega irrigation schemes.

Institutionalisation of the project The LAPSSET Corridor Project is the first single integrative infrastructure Project the Government has initiated and prepared under Vision 2030 Strategy Framework without external assistance.

Kenya is spearheading the development of the LAPSSET Corridor to strengthen the country's position as a gateway and a transport and logistics hub to the East African sub-region and the Great Lakes region to facilitate trade, promote regional economic integration and interconnectivity between African countries. The project is managed by the LAPSSET Corridor Development Authority (LCDA), which reports to the Presidency.

Mandate of LAPSSET Corridor Development Authority In March 2013, the LAPSSET Corridor Development Authority (LCDA) was established through the Presidential Order Kenya Gazette Supplement No. 51, Legal Notice No. 58, The LAPSSET Corridor Development Authority Order 2013 to plan, coordinate and manage the implementation of the Lamu Port-South Sudan-Ethiopia Transport Corridor Project. A director general heads the 11 member board that includes five state officials, private sector representatives and a chairman appointed by the president. The LCDA will push for public private partnerships to help in implementation of the project. The Authority is reporting to the Presidency in accordance with the Constitution of Kenya. The LCDA is headed by Mr. Silvester Kasuku, MBS, CMILT, Director General/ Chief Executive Officer and Amb, Dr. Francis Muthaura, EGH, chairman of the Board of the Authority. The functions of the LCDA are as follows:

i. Plan, coordinate and sequence LAPSSET Corridor projects in collaboration with implementing ministries and agencies; ii. Coordinate implementation of LAPSSET Corridor projects across implementing ministries and agencies; iii. Provide leadership, direction and guidance in operations and implementation of the LAPSSET Corridor; iv. Ensure implementation of all decisions and resolutions of the government; v. Mobilize funds to project components using a variety of resources including budgetary resources from government, donor loans, infrastructure bonds and private finance; vi. In collaboration with National and County government department, build the capacity of LAPSSET Corridor towns to manage urban growth resulting from LAPSSET Corridor investments; vii. Promote the competitiveness and use of the LAPSSET Corridor for the transport of goods and people; and viii. Provide a forum for all stakeholders of the LAPSSET Corridor.

The LCDA is the policy, implementation, operational coordination and technical oversight organ for the LAPSSET Corridor Project. The LCDA has inter-ministerial coordination committees composed of relevant ministries.

Economic viability of LAPSSET program Project studies that were completed in 2011 on the LAPSSET Corridor project components showed great economic viability with most of the project components registering High Economic Internal Rates of Return of between 17% and 23.4% compared to acceptable industry minimum standard of 10% for infrastructure projects as shown in Table 1 below.

Table 1: LAPSSET Corridor Project Components with accompanying cost implications NoItemQuantityCost (US$) millionsEIRR %1Lamu port23 berths3,095 23.4 2Railway1,710 km7,099 17.8 3Highway880 km1,398 12.9 4Crude Oil Pipeline2,240 km3,949 21.6 5Product Oil Refinery120,000bpd2,800 13.9 6Resort Cities3 Lots1,214 20.8 7Airports3 Lots506 20.7

Services NoItemQuantityCost (US$) millionsCost (KSh./=) trillions1High Grand Falls (Hydro + Water)1 Lot2,110 2Associated Infrastructure 2,500 Total cost 24,524 2,403

Note 1: Both all and each project components are judged as viable in view of national economy as EIRRs computed are more than 12%, which is opportunity cost.

Note 2: Cargoes are generated by the Corridor itself. Higher figures than the above table can be realized.

From the statistics provided, it is therefore evident that if the government structured the projects into bankable bundles, it would attract private sector investors to participate and invest in the projects.

Funding The Lamu port construction project is currently being funded by the Government of Kenya using domestic tax revenue."A mega project rises in East Africa"https://www.un.org/africarenewal/magazine/august-2016/megaproject-rises-east-africa

The Development Bank of South Africa had offered to fund construction of Lamu–Garissa–Isiolo Road to the tune of KSh.126 billion/= (US$1.5 billion).

Cost of LAPSSET program The seven key infrastructure project components of the LAPSSET Corridor Program require substantial amounts of resources, with a budget estimate of US$24.5 billion, equivalent to KSh.2 trillion at current exchange rates, in construction costs. It is estimated that Lamu Port, with its 23 berths alone, will cost approximately US$3.1 billion, the Railway US$7.1 billion, while the crude oil pipeline will cost a further estimate of US$3 billion for the Lamu to Lokichar trunk line alone.

Indeed, the figures indicated above are no mean task and cannot be left to the Government's limited resources alone. The Government has prioritized the participation of the private sector in the development of LAPSSET Corridor infrastructure through infrastructure bonds and equity participation, among other money market instruments. There is already significant private sector interest being registered towards the implementation of these project components; hence, the need has arisen for the government to structure and package bankable projects that are investor-ready for uptake by the private sector.

In January 2024, Kenya Railways Corporation estimated that development of the railway projects would cost the government at least Ksh2.4 trillion (US$16 billion).

Status of implementation of LAPSSET Corridor projects The government undertook groundbreaking for the LAPSSET Corridor Program at the Lamu Port site on 2 March 2012. Afterward, it commenced construction activities for various infrastructural facilities and services aimed at progressing the implementation of the LAPSSET Corridor Project. The ongoing construction works for various project activities are summarized below.

Lamu Port Construction activities for various facilities at the Lamu Port site are ongoing, with progress for the Lamu Port Building and Port Police and security facilities having achieved a completion rate of 95%.

Port Building: 95% complete. Police Station: 95% complete. Design review ongoing for the first three berths, with construction to begin in July 2014 The physical development plan and survey for the port area has been completed.

The Government has so far allocated KSh.4.2 billion in preparation for the commencement of construction works for the first three berths. The government is also in the process of mobilising more resources from its own revenue resources as well as from private sector investors through equity and debt including bonds while mobilisation of more funds through equity and debt participation by investors for the construction of the first three berths and its associated infrastructure. These three berths are being constructed by China Communications Construction Company at a cost of nearly $480 million, and will reportedly be opened by 2020.

Lamu Port is expected to consist of 23 berths when complete, will cost US$3.5 billion and be in size. The port will be a deep water port at 18 m depth.