Kenya seeks private funding for 61% of $4.6 billion irrigation drive

Kenya wants private investors and financiers to supply 61% of the money for a $4.6 billion irrigation plan, putting them at the centre of its push to strengthen food security. The challenge is not only to bring water to more farmland, but also to make equipment and financing reach smallholder farmers.

The National Irrigation Sector Investment Plan, covering 2025–2035, requires Sh598 billion and aims to expand irrigation to more than 1.5 million acres, according to Capital FM Kenya Business (direct). Water, Sanitation and Irrigation Cabinet Secretary Eric Muriithi said the programme would also help Kenya withstand climate change. Speaking at an irrigation forum in Nairobi, he said the government could not fund the effort on its own.

“Public financing alone cannot get us there, and it was not designed to,” Muriithi said.

Muriithi presented the plan as a common framework for government, donors, commercial banks, equipment suppliers and agribusinesses, with shared oversight and goals. The two-day Eastern and Southern Africa Private Sector Forum on Irrigation brought together representatives from 39 governments alongside businesses. Its task was to identify the barriers, risks and market failures holding back private money from the sector.

Turning investment plans into equipment sales

Kenya is working with the World Bank and the International Finance Corporation on the Kenya Resilient Irrigation for a Sustainable Economy programme, known as K-RISE, to put the investment plan into practice. The programme is nearing the end of its development. Qimiao Fan, the World Bank’s division director for Eastern and Southern Africa, said it would offer financing tools to tackle investment hurdles, with job creation and farmer empowerment among the intended outcomes.

One tool is a Results-Based Finance Facility, which links financial support to confirmed delivery. It will give rebates and grants to irrigation equipment dealers, suppliers and service providers after sales and installations have been verified. The facility will focus particularly on energy-efficient systems reaching smallholders. Muriithi described the arrangement as a way for businesses to grow their markets while the government secures verified irrigation coverage.

A second tool, the Risk Sharing Facility, is intended to encourage commercial banks, microfinance institutions and savings and credit cooperatives to create loans specifically for irrigation. It will offer first-loss guarantees, which cover initial losses, and partial credit guarantees, which cover a share of lending risk. A third tool, the Patient Capital Facility, will provide longer-term funding to accommodate the extended repayment periods needed by equipment suppliers and financiers serving farmers at the end of the delivery chain.

Ten schemes to test the approach

Kenya has selected 10 irrigation schemes for a pilot intended to raise agricultural output and open markets for farmers. Together, they cover about 14,819 acres and serve 52,115 farmers. Their crops include rice, maize, horticultural produce, vegetables, pulses, potatoes, onions and avocados. The pilot gives the broader investment programme a defined set of schemes in which to begin pursuing those goals.

The government also wants farmers to pool produce through cooperatives and build direct relationships with processors, exporters and other buyers. The next steps to watch are the completion of K-RISE’s development and the rollout of the pilot schemes, alongside whether the financing tools can draw the private participation on which the plan depends.