A private investor will inject Sh12.5 billion into the Galana-Kulalu project as the Kenya Kwanza administration moves to breathe life into the controversial food security scheme.
The National Treasury has listed the project as one of the three Public Partnership Projects, or PPPs, from which it is set to mobilise a total of Sh64.5 billion by the end of June this year.
Selu Limited, a special-purpose vehicle established to invest in and transform the Galana-Kulala irrigation project, was awarded 20,000 acres in the scheme to produce 720,000 bags of maize and 160,000 bags of soybeans annually for 30 years.
In a PPP project, the government partners with a private investor by offering certain incentives, which can be in the form of land, as in the case of Galana Kulalu Food Security, which straddles the two coastal counties of Tana River and Kilifi.
“During financial year 2024/2025, the National Treasury projects to mobilise a total of Sh50 billion from the following projects: 35MW Orpower Geothermal Project (Sh11 billion); Galana Kulalu Food Security Project Project (Sh12.5 billion) and Africa 50 transmission lines (Sh41 billion),” says the Treasury in the Draft 2024 Budget Policy Statement.
Mooted in 2013 by the Jubilee government, the Sh9 billion project has had several hiccups.
The most notable setback was the exit of the Israeli contractor, Green Arava in 2020 due to differences over payment with the Water ministry. By the time Arava threw in the towel, the State had already paid the contractor Sh5.9 billion out of the Sh6.35 billion loan from Israel’s Bank Leumi.
The government insists that taxpayers did not lose any money as the contractor had done most of the work on the 10,000-acre model farm at Galana Kulalu.
Production in the model farm had also been less impressive. While it was projected to make Sh1.2 billion in maize sales per season, as of 2019, the project only managed 119,000 90-kilogramme bags of maize, worth about Sh273.7 million, raising questions over its viability.
The Galana Food Security Project is aimed at improving food security in the country, bridging the widening gap between food production and consumption that has left millions of Kenyans hungry.
