LAMU (Kenya), Aug 31: A mega-port project on the north Kenyan coast conceived in the 1970s may finally be gaining traction based on commercial oil finds in Uganda and Kenya, but it needs more financing to compete with a Chinese-backed port in Tanzania and other rivals.

Initial work has started on a mangrove coast near the ancient Arab trading post of Lamu that could in a few years be a bustling container port and crude terminal, creating an export hub for east African states and their oil.

But Kenya must shore up regional commitment for the $25.5 billion Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) plan that by 2030 envisages a port, new roads, a railway and pipeline.

It must also overcome environmental worries and make a clearer economic case to avoid creating one more African white elephant.

The prize will be to bolster Kenya’s primacy as east Africa’s trade gateway and capitalise on a bonanza from one of the world’s hottest undeveloped oil provinces, where exports from Uganda and Kenya alone could reach 500,000 barrels per day.

Experts say the Lamu port and transport links are viable, if not on such a huge scale. Some South African banks are watching closely. But emerging markets now face tougher times raising cash and no big donors, such as China, have thrown their full weight behind the plan. Other pitfalls also lurk.

“The big obstacle is really a political one and making sure all the discussions that need to happen, happen,” said Clare Allenson, analyst at the Eurasia Group consultancy, referring to a region where rivalries can run deep even within the east African trade bloc.

“This is a very grandiose scheme and there are ample examples of this type of thing never coming off the ground (in Africa),” she said.

Initially predicated on convincing South Sudan to switch its oil exports to Lamu from the regularly disrupted pipeline it now uses via Sudan, the Kenyan scheme has found a new raison d’etre. —Reuters