Kenya Airports Authority (KAA) is in the market for $892 million (about Sh114.66 billion) for the modernisation of Jomo Kenyatta International Airport (JKIA) as part of its efforts to enhance the authority’s operational capacity and boost revenue generation.
Acting Managing Director, Henry Ogoye said JKIA is almost 10 years behind in infrastructure development, noting that the facility is struggling to keep pace with the rising demands of both passenger and cargo traffic.
“JKIA’s existing infrastructure is inadequate,” he stated, adding that it can only process 33 plane movements per hour and has a parking bay that accommodates just 68 aircraft. “To meet future demands, these numbers must double by 2028,” Ogoye added during a two-day aviation media workshop in Nairobi last week.
He said the current cargo capacity is particularly constrained, limited to just 9 aircraft, noting this has forced KAA to utilise passenger aircraft stands for cargo operations. To address the increasing trade volumes, the modernisation plan aims to expand this capacity to 21 dedicated cargo stands by 2028. This initiative is essential for ensuring JKIA retains its competitive edge as a premier aviation hub in East Africa.
Financially viable project
The proposed investment is projected to generate approximately $900 million (around Sh115.7 billion) in revenue, making it a financially viable project.
However, KAA faces significant challenges due to low airport charges, which restrict its ability to invest adequately.
“KAA has limited headroom to access other sources of finance,” Ogoye explained, adding: “We do not have enough money to invest because charges are low in $ terms and cannot support investment, which comes on the basis of market value
Currently, only three of the 21 facilities managed by KAA are profitable: JKIA, where for every shilling generated, 59 cents are spent, Moi International Airport, which spends 74 cents for every shilling generated; and Wilson Airport, which spends 77 cents for each shilling generated. Ogoye said the remaining airports are accumulating debts due to expenditures exceeding revenues. For instance, Isiolo, which is the most expensive, spends Sh9.14 for every shilling generated, while Kisumu and Lokichogio spend Sh2.30 and Sh9.11 respectively.
To navigate these financial hurdles, KAA is exploring partnerships with private entities, notably the controversial 30-year concession proposal from Adani Airport Holdings (AAHL) for managing JKIA. This partnership could facilitate essential upgrades without imposing additional financial burdens on KAA.
AAHL has proposed an investment of about $1.84 billion (about Sh236 billion) for this modernisation project, which includes $750 million (about Sh96.4 billion) for a new terminal building, $92 million (approximately Sh11.8 billion) for runway improvements and additional parking, and $620 million (approximately Sh79.7 billion) for integrating new facilities.
