Galana-Kulalu project secures Sh12.5 billion investment to boost Kenya's food security

A private investor has committed to injecting Sh12.5 billion into the long-awaited Galana-Kulalu irrigation project as part of the Kenya Kwanza administration's renewed push to revitalize the controversial food security initiative.

The National Treasury has confirmed that the project is among three major Public-Private Partnership (PPP) initiatives set to mobilise a total of Sh64.5 billion by the end of June 2025.

A key player in this effort is Selu Limited, a special-purpose vehicle tasked with transforming the Galana-Kulalu project.

The firm has been allocated 20,000 acres within the scheme to produce 720,000 bags of maize and 160,000 bags of soybeans annually over the next 30 years.

"The Galana Kulalu Food Security Project is one of the most ambitious efforts to boost Kenya's food production. The government is using incentives such as land allocation to attract private investment, which is crucial for the success of the project," said a Treasury official.

Launched in 2013 under the Jubilee Government with an initial budget of Sh9 billion, the project has faced numerous challenges, including the 2020 exit of its Israeli contractor, Green Arava.

The contractor pulled out due to a dispute with the Water Ministry over payment terms.

At the time of their departure, the government had already paid Sh5.9 billion of a Sh6.35 billion loan from Israel's Bank Leumi.

Despite these challenges, the government maintains that the taxpayer did not lose money as the contractor had completed much of the work on the 10,000-acre model farm.

However, the project's performance has raised doubts. Although the model farm was expected to generate Sh1.2 billion in maize sales per season, by 2019, it had only produced 119,000 90-kilogram bags of maize, worth about Sh273.7 million far below expectations.

This has led to ongoing questions regarding the long-term viability of the project.

The Galana-Kulalu Food Security Project remains central to Kenya's efforts to address the country's deepening food insecurity.

The initiative seeks to bridge the growing gap between food production and consumption, which has left millions of Kenyans facing hunger.

In the Draft 2024 Budget Policy Statement, the National Treasury outlined projections for the financial year 2024- 2025.

Among the three major PPP projects identified, the Galana-Kulalu project will contribute Sh12.5 billion, alongside the Sh11 billion expected from the 35MW Orpower Geothermal Project, and Sh41 billion from Africa 50 transmission lines.