Project Summary:
Background
Many Kenyan universities are facing accommodation shortages for students due to the increasing number of Kenyans seeking higher education. This is particularly true for Kenyatta University, which had a population of 74,000 undergraduate students and space to house only 10,000 in 21 hostels. To address this issue, Kenyatta University pursued a PPP to build and operate more hostels to accommodate the growing number of students. The project received IFC advisory support.
Project Structure
In 2014, a consortium of several domestic Kenyan companies led by Africa Integras won a public tender for a PPP worth of USD 57 million to construct and operate Kenyatta University Hostels for 20 years. Africa Integras is a US-based private equity firm that specializes in developing education infrastructure using PPPs. The hostels would be transferred to the University at the end of the contract. The contract with Kenyatta University was signed in June 2015.
The project entails the construction of handicapped-accessible dormitory facilities sufficient to house 9,350 undergraduates, 500 postgraduates, and 150 married students on 70,915 m2 of land. The hostel amenities are to include leisure facilities, cafes, and study areas.
Africa Integras obtained financing for the project from international financiers. The hostels generate revenue from the students who pay to reside in them. However, to reduce the collection risk, the hostel rents are collected by the University as part of the tuition. The University would then pass these payments on to the project company.
Lessons Learned
This PPP model made it possible for Kenyatta University to address the housing shortage for university students, while also keeping university education affordable through lower cost accommodations. The project began construction in April 2018.1
Footnote 1: https:// creativecommons. org/licenses/bysa/ 3.0/legalcode
