Sustainable Urban Economic Development (SUED) Programme
From Complexity to Clarity: How Wote’s PPP Journey Is Shaping a Replicable Model for Kenya’s Intermediary Cities
In Kenya’s intermediary cities (those fast-growing urban centres bridging rural and metropolitan economies)unlocking economic potential often hinges on overcoming deeply entrenched structural challenges. Wote, the capital of Makueni County, is demonstrating how strategic support and innovation can overcome these barriers. Through the SUED-supported PublicPrivate Partnership (PPP) model for agribusiness processing, Wote is building transformative facilities and pioneering a replicable framework now being adapted by other counties.
The Challenge: Untangling the PPP Puzzle in Devolved Urban Systems
Implementing PPPs in intermediary cities is notoriously difficult. Wote’s experience reveals five core challenges that many counties face:
• Fragmented Governance Structures: Aligning national PPP authorities, county executives, sectoral departments, and community cooperatives required months of negotiation and coordination. This is a common issue in Kenya’s devolved system, where overlapping mandates and unclear roles often stall progress.
• Technical and Financial Complexity: Developing bankable projects meant conducting feasibility studies, financial modeling, asset valuations, and environmental impact assessments. For MFPP and MGPP, this involved securing Cabinet and County Assembly approvals a process that demands both technical capacity and political will.
• Blended Finance Structuring: Raising KES 800 million across two projects required a mix of county budget allocations, concessional loans, viability gap funding, and potential carbon finance. This kind of financial engineering is rare in intermediary cities, where access to capital is limited and risk appetite is low.
• Procurement Under Dual Legal Regimes: Navigating both the national PPP Act and county procurement laws meant customizing tender documents and concession agreements. Wote’s two-stage tender process (EOI then RfP) was a first for many stakeholders.
• Ensuring Long-Term Sustainability: SUED proposed embedding performance-based payments, capacity-building for county staff, and seasonal supply risk mitigation strategies. These challenges are not unique to Wote. Studies show that intermediary cities across Kenya face similar barriers in attracting inwards investment from the private sector to complement the public sector.
The Breakthrough: A Tested and Transferable PPP Framework
Despite the complexity, Wote succeeded. Within seven months of PPP application, three consortia were pre-qualified, and two advanced to final bids. MFPP signed a 15-year concession with the potential of unlocking more than KES 4 billion in private investment and KES 1.1 billion in green finance. MGPP has similar investment projections.
SUED and Makueni County documented every step, creating a modular PPP toolkit now that can be utilised by other intermediary cities. This includes stakeholder mapping templates, financial model spreadsheets, procurement checklists, and draft concession clauses.
Why It Matters: A Blueprint for Kenya’s Urban Transformation
Intermediary cities are central to Kenya’s urban future. They host over 30% of the population and serve as critical nodes for rural-urban linkages, trade, and migration. Yet they often lack institutional capacity and investment frameworks to drive inclusive growth.
Wote’s PPP model offers a way forward. It is replicable, inclusive, and resilient; integrating smallholder farmers, cooperatives, and local governments while embedding climate-smart infrastructure and green finance mechanisms.
With continued support from the UK Government and strategic implementation by SUED, intermediary cities across Kenya can demystify, de-risk, and deliver complex PPPs that unlock transformative development.