The Public Private Partnerships (PPP) Act of 2021 marked a significant shift in Kenya’s approach to infrastructure development by explicitly empowering county governments and their corporations to enter into PPP agreements.
This decentralisation opens a new frontier for impactful projects tailored to local needs. By leveraging private sector expertise and financing, counties can potentially overcome budget constraints and fast-track quality service and infrastructure delivery.
The good news notwithstanding, implementation of county-level PPPs remains in early stages. According to the Quarterly Projects Progress and Status Report published in March 2025 by the Directorate of PPP, only two of the 35 projects in the national PPP pipeline are county projects — both still at early development stages.
Several challenges have slowed progress. One key issue is the lack of a regulatory framework tailored specifically to counties. The current national framework doesn’t adequately guide the selection, structuring, and procurement of smaller-scale PPPs typical at the county level.
Additionally, being a new concept, counties face major capacity gaps in project development, appraisal, negotiation, and implementation. While they are often required to hire transaction advisors, such services are typically costly and beyond their reach.
Investor confidence is also hindered by concerns over county governments’ financial health, political stability, and governance — all critical for long-term partnerships.
Furthermore, local communities sometimes perceive PPPs as privatisation or “takeovers” of public assets, triggering resistance, especially where public engagement is weak.
The smaller scale of initial county PPPs can also deter private investors, particularly in the absence of proven success stories and strong national government support. Many investors prefer larger, more established projects.
Nevertheless, well-structured county PPPs hold significant promise. Their smaller size makes them suitable for building local capacity and creating a track record of successful implementation. Lessons learned from these projects can pave the way for larger PPPs in the future.
Counties can also explore alternative local financing sources, such as Saccos, community bonds, and local banks. Tapping into these could not only finance PPPs but also foster local ownership and financing.
Furthermore, PPPs offer counties a way to reduce pressure on their limited budgets, particularly those with low own-source revenue, by shifting initial capital investment to the private sector.
To unlock the potential of county PPPs, a multi-pronged approach is needed including;
Tailored Regulations: The National Treasury, working with the Council of Governors and stakeholders, should develop regulations suited to county-level PPPs.
Capacity Building: The PPP Directorate should offer hands-on support and training using real county projects. Collaboration with experienced institutions and infrastructure centres of excellence can strengthen this effort.
Governance and transparency: Counties must strengthen financial management, improve creditworthiness, and promote transparency to boost investor confidence.
Public Engagement: The Directorate of PPPs and counties should prioritise awareness campaigns to dispel myths and involve communities throughout the project lifecycle.
Investment Vehicles: Counties can establish private-sector-oriented investment companies to attract and manage private investment more effectively.
Cunty governments represent Kenya’s next big opportunity for impactful PPPs. With the legal foundation already in place, the focus must now shift to capacity building, tailored policies, and collaborative action.
Done right, county PPPs can be a game-changer—unlocking economic potential, enhancing service delivery, and driving transformative grassroots development.
