Kenyan Govt in Talks Lease Galana Kulalu Land to UAE Firm for Ksh103 Billion

The government is reportedly in talks with the United Arab Emirates (UAE) to lease part of the troubled Galana Kulalu Irrigation Scheme.

According to reporting from Bloomberg, the government is in accelerated talks with an agricultural firm based in Abu Dhabi to lease 200,000 acres at a price of about Ksh103.39 billion.

The international publication quotes the Principal Secretary for Irrigation, Ephantus Kimotho, who asserts that the deal will be signed early next year.

“We are still negotiating, but we might soon sign a memorandum of understanding,” Kimotho told Bloomberg in a phone interview.

Kimotho did not provide more details on the matter, which comes hot on the heels of the government’s push to attract more private investors in the country.

The scheme that encompasses approximately 1.75 million acres of land has failed to completely take off despite having an ambitious plan to have all the land cultivated. At the moment, only 10,000 acres of the land are under cultivation.

This year, the government allocated Ksh100 million towards the completion of the project, which has been allocated millions almost every financial year since 2014. At a total cost of Ksh7.9 billion, the project is one of the country’s white elephants.

Sandwiched between Kilifi and Tana River Counties, the irrigation project is part of the country’s Vision 2030 and a roadmap towards attaining food security.

The firm that is in talks with Kenya specialises in the cultivation, production, and trading of animal feed and essential human food commodities such as rice, flour, fruits, and vegetables.

The company, backed by the Abu Dhabi sovereign wealth fund, has expanded its operations globally, managing a land bank of approximately 350,000 acres across four continents. Its infrastructure includes forage processing and baling facilities, rice and flour milling plants, and dairy farms.

The timing of the deal is likely to raise eyebrows with President William Ruto’s government already locked in talks with the UAE for a Ksh193 billion loan.

According to reporting from the same publication, the first tranche of disbursement will be worth Ksh90 billion in January of next year, with the rest of the amount set to be channelled to the Kenyan accounts later.

It remains unclear whether the deal will be a public-private partnership or a strait land deal. The government has been facing upheaval over a proposed PPP project by the Adani Group for the construction of power transmission lines and the expansion of the Jomo Kenyatta International Airport (JKIA).

“It is important to appreciate that the partnership between the public and the private sector gives us a win-win outcome to deliver public services using the efficiency and investment of the private sector,” stated Ruto in October.