The Treasury has revealed a Sh103.76 billion termination or break fee that Kenya will pay to the owners of the Nairobi Expressway should the 27-year public-private deal be terminated prematurely.
The disclosures show termination of the Chinese-backed expressway dwarfs all other public-private partnership (PPP) break fees, underscoring the extent to which its owners sought to protect themselves from regime transitions in a country where new administrations have cancelled or revised mega projects.
Locally incorporated Moja Expressway, a subsidiary of China Road and Bridge Construction (CRBC), built and funded the construction of the 27.1-kilometre super highway and will recoup its investments from tolling over 27 years. It was constructed under the previous administration of Uhuru Kenyatta under the PPPs to finance the construction of highways and other infrastructure after public debt ballooned.
Termination fees of Nairobi’s expressway account for more than half of the Sh203 billion in PPP break fees for 11 infrastructure projects.
The potential payout to Moja Expressway in the event of termination of the deal set to run to 2049 is equivalent to 29.03 percent of the projected revenue of $2.765 billion (about Sh357.35 billion) over the 27 years.
It is also about 82.17 percent of $977 million (Sh126.27 billion) the firm will earn in the form of dividends and equity release (recoup of capital and returns therein) during the concession period.
The Treasury’s disclosures show that while PPPs such as the Nairobi Expressway are structured to shift financing and operational risks to the private investor, they expose taxpayers to hefty fees in the event of the collapse of the deals or State breach.
“Assuming the worst-case scenario of termination of PPP projects due to contracting authority default, the maximum termination sums as at financial close for executed projects have been reported as the contingent liability,” the Treasury writes in the Annual Public Debt Report for the financial year 2024-25.
“As of the end of June 2025. total estimated exposure related to termination sum payments amounts to Sh203 billion. Assuming 5.0 percent probability of termination by the contracting authorities, contingent liability associated with PPP projects arising from project termination payments is Sh10.19 billion as of end June 2025.”
Under the PPP structure, private investors recover their investments by charging user fees over a defined concession period.
The regime of former President Mwai Kibaki enforced the PPP Act in January 2013, banking on private capital to deliver large infrastructure projects without tapping taxpayers’ cash or piling on new loans, and further ballooning the public debt.
The model has so far delivered 11 projects, with the Nairobi Expressway being the largest and most commercially significant.
Moja Expressway collects tolls of between Sh170 and Sh500 from motorists in a 27-year operating agreement after the road opened in May 2022.
The road, which cost Sh70.78 billion to build, runs from Mlolongo in Machakos County to Westlands in Nairobi.