Executive Summary

Kenya has opened a US$390 million tender for tech firms to build high-speed internet for over 1,000 rural schools, clinics, and offices. Funded by the World Bank, the project ensures a transparent bidding process and reliable payments for the selected contractors. Bids are due by October 1, 2025, with the project’s construction phase scheduled to start in January 2026.

This initiative represents the cornerstone of Kenya’s ambitious digital transformation agenda, positioning the country to bridge the substantial digital divide that sees urban areas achieving 64.6% mobile phone ownership compared to just 48.6% in rural regions. The project forms the foundational pillar of the Kenya Digital Economy Acceleration Project (KDEAP), designed to leverage Kenya’s status as East Africa’s premier technology hub while extending digital benefits to the nation’s most underserved communities.

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Project Scope and Technical Specifications

Comprehensive Infrastructure Development

Kenya is leveraging its status as a regional technology leader to launch one of East Africa’s most ambitious rural infrastructure projects, opening a US$390 million tender that invites global technology firms to bid on a sweeping digital build-out. The country’s ICT Authority announced the initiative on Tuesday, formally kicking off a competitive process to connect more than a thousand of its most remote schools, health clinics, and government offices to high-speed internet.

For technology service providers, the scope of work is extensive and covers the full lifecycle of network deployment. The contracts will involve laying a resilient terrestrial fibre-optic network, erecting a grid of 4G and 5G-ready telecommunication towers, and installing last-mile solutions like fixed wireless and public Wi-Fi hotspots. Crucially, the tender also includes the operation of these networks and the implementation of digital literacy programs, creating long-term service revenue opportunities beyond the initial construction.

Framework Agreement Structure

The procurement process will establish Framework Agreements for non-consulting services, allowing the government to award Call-off Contracts for broadband provision over a period of three years, extendable by two additional years. ICTA will act as the sole employer under these agreements. According to the bid notice, both single and multiple service providers will be considered.

The evaluation process will follow World Bank standards, placing 80% weight on technical and other non-price factors, and 20% on cost. This structure emphasizes quality and sustainability over lowest-cost bidding, reflecting the project’s long-term strategic importance.

Digital Divide: The Challenge Kenya Faces

Stark Urban-Rural Disparities

Recent comprehensive research reveals the magnitude of Kenya’s digital challenge. According to a joint report by the Communications Authority of Kenya (CA) and the Kenya National Bureau of Statistics (KNBS), mobile phone ownership among Kenyans aged three and above stands at 53.7% nationally. However, urban residents achieve 64.6% ownership compared to just 48.6% in rural areas, with adoption closely linked to income, education, and access to reliable electricity.

The digital divide extends beyond mobile phones to more sophisticated technology access. Computer usage is significantly higher in urban areas (20.9%) compared to rural areas (7.3%), highlighting a pronounced technological gap. Internet usage shows similar disparities, with only 23.8% of households nationally reporting internet access, rising to 56.5% in urban areas but falling to just 25.0% in rural regions.

Regional Variations and Economic Impact

The geographical distribution of digital access reveals stark contrasts across Kenya’s 47 counties. Nairobi City leads with 98.8% mobile phone ownership and 64.7% internet usage, while counties like Turkana lag with 69.1% mobile phone ownership and West Pokot reports only 9.1% internet usage. These disparities correlate strongly with economic development indicators, creating a cycle where digital exclusion perpetuates economic disadvantage.

The 2024 Gross County Product (GCP) Report indicates a strong correlation between ICT access and economic performance, underscoring the transformative potential of the rural broadband initiative.

Kenya Digital Economy Acceleration Project (KDEAP)

Multi-Phase Strategic Framework

The tender represents the foundational pillar of the Kenya Digital Economy Acceleration Project (KDEAP), a comprehensive five-year national strategy. The program aims to move beyond basic connectivity, using the new infrastructure as a platform to enhance digital government services, foster tech entrepreneurship outside of Nairobi, and equip a new generation of Kenyans with critical digital skills.

The World Bank approved $390 million in financing for the first phase of a program that aims to expand access to high-speed internet, improve the quality and delivery of education and selected government services, and build skills for the regional digital economy. The project uses a Multi-phase Programmatic Approach (MPA) with two phases: phase one running from 2023-2028, and phase two from 2026-2030.

Three Strategic Components

The KDEAP framework encompasses three key components:

Component 1: Digital Infrastructure and Services – This component aims to increase access to high-speed internet for individuals, industry, and government—the ‘foundation of the foundations’ of a digital economy and strengthen Kenya’s role as regional digital leader while leveraging investments from the private sector.

Component 2: Digital Government and Services – This component will invest in the foundational digital services, platforms, architectures, and policies needed to transform the way the government communicates and conducts its internal operations.

Component 3: Digital Skills and Markets – The goal of this component is to equip young Kenyans with digital skills and strengthen their abilities to access and compete in domestic and international digital markets.

Kenya’s Digital Superhighway Vision

Ambitious Infrastructure Goals

The rural broadband project operates within the broader context of Kenya’s Digital Superhighway Project, announced in February 2023. The Digital Superhighway will prioritize the expansion of Kenya’s fiber network coverage countrywide with plans to lay 100,000 kilometers (62,000 miles) of fiber optic cable and erect 25,000 public Wi-Fi hotspots.

The comprehensive infrastructure plan includes the establishment of Digital Village Smart Hubs in each of Kenya’s 1,450 wards (the country’s lowest administrative units) and the digitization of over 5,000 government services within six months of approval.

Current Infrastructure Foundation

Kenya has already made substantial progress in digital infrastructure development. The country has built more than 13,590 kilometers of terrestrial fiber that has reached all Kenya counties via the National Optic Fibre Backbone Infrastructure Project (NOFBI), with Phase 1 implemented in 2008, Phase 2 in 2014, and 2E in 2017.

Recent budget allocations demonstrate the government’s commitment to digital transformation. The National Treasury allocated Sh12.7 billion to the ICT sector under the digital superhighway initiative in the 2025/2026 budget, with an additional 4,690 kilometers of high-speed fiber optic cable laid to enhance broadband access in previously underserved counties.

Economic Impact and Market Context

Kenya’s Tech Leadership Position

Kenya is considered the leading technological hub of East Africa and stands at the forefront of mobile broadband connectivity, mobile financial services, and a robust ICT infrastructure. According to Business Monitor International (BMI), Kenya’s ICT sector grew by an average of 10.8% annually in the last decade, with the digital economy expected to contribute up to 9.24% of the country’s GDP by 2025.

The country’s success in attracting international technology investment demonstrates its regional importance. Big-tech companies such as Amazon Web Services (AWS) recently chose Kenya for their regional development and Edge data centers, recognizing the country’s potential as a regional center and testbed for emerging technologies, cloud, and AI applications.

Startup Ecosystem and Investment Climate

Kenya’s thriving startup ecosystem provides additional context for the rural broadband initiative. In 2023, Kenyan entrepreneurs attracted close to $800 million in funding, mostly in technology, climbing to the top spot in Africa. On a pure dollar basis, Kenya received more startup capital than any other country on the continent, outperforming Nigeria, Egypt, and South Africa.

The rural connectivity project aims to extend these innovation benefits beyond Nairobi’s urban concentration, creating opportunities for tech entrepreneurship in previously underserved regions.

Private Sector Mobilization and Financing

Blended Financing Strategy

The project is anchored by substantial World Bank financing, providing a secure financial foundation that is expected to de-risk the investment for private contractors. This public funding is designed to act as a catalyst, with the government anticipating it will attract an additional US$100 million in private-sector investment for ancillary services and future expansions.

“Broadening access to digital technologies and services is a cross-cutting pathway to accelerate economic growth and job creation, improve service delivery, and build resilience,” said Keith Hansen, World Bank Country Director for Kenya, Rwanda, Somalia and Uganda. The initiative will increase last-mile connectivity by boosting broadband network coverage for over 70% of Kenya’s population that resides in rural and underserved areas.

Risk Mitigation and Governance

To assure international bidders of a level playing field, the entire procurement process will be managed under the World Bank’s stringent governance framework. This mandates a transparent, open bidding process, includes robust anti-corruption safeguards, and ties contractor payments to the verified achievement of project milestones.

This structure is intended to attract top-tier global firms by providing a clear and secure framework for a project of this scale and complexity, addressing historical concerns about procurement transparency in large-scale African infrastructure projects.

Implementation Timeline and Procurement Process

Aggressive Deployment Schedule

The timeline for the project reflects the government’s urgency to accelerate its digital agenda. Bids must be submitted to the ICTA by October 1, 2025, with the authority planning to announce the successful contractors before the end of the year. Fieldwork is slated to commence in January 2026, marking a rapid transition from planning to execution.

Technical bids will be opened on the same day at Telposta Towers, Nairobi, while financial bids will remain sealed until the second opening. This two-envelope system ensures technical capabilities are evaluated independently of pricing considerations.

Procurement Standards and Accessibility

Tender documents can be downloaded for free from the ICTA and Public Procurement websites, ensuring accessibility for international bidders. The evaluation process follows international competitive procurement standards, with specific procurement notices published on the World Bank’s external website, ICT Authority website, Public Procurement Information Portal, and local newspapers.

Regional and International Context

East African Digital Integration

Kenya’s rural broadband initiative extends beyond national borders, with implications for regional digital integration. The project includes expanding fiber backbone and last-mile connectivity along Kenya’s borders with neighboring countries, benefiting the regional digital market and strengthening Kenya’s position as a digital hub for East Africa.

This regional dimension aligns with Kenya’s ambition to become one of the premier digital investment and innovation hubs on the African continent, leveraging the economies of scale and network effects of a larger and more competitive regional market.

Global Digital Development Trends

The Kenya project reflects broader global trends in digital development financing. The World Bank has approved similar investments across Africa, including US$150 million toward Senegal’s digital transformation, demonstrating the institution’s commitment to continental digital development.

African countries have increasingly secured grants and finances toward their digital transformation plans, with Ghana receiving US$200 million, Uganda US$140 million, and Rwanda US$40 million for similar digitization projects.

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Technical Infrastructure and Innovation

Advanced Network Technologies

The rural broadband project incorporates cutting-edge telecommunications technology, including 4G and 5G-ready infrastructure to ensure future-proof connectivity. The technical specifications call for resilient terrestrial fiber-optic networks complemented by last-mile solutions including fixed wireless and public Wi-Fi hotspots.

Kenya’s current digital infrastructure provides a strong foundation for expansion. The country maintains six submarine fiber-optic cables offering broadband connectivity, with geographical and population mobile broadband coverage reaching 56% and 96% respectively.

Sustainability and Green Technology

The project emphasizes sustainable technology deployment, with the government planning to establish green energy plants for sustainable electricity supply to ICT systems to ensure reliable and accessible services as well as service continuity. This approach leverages Kenya’s abundant renewable energy resources, particularly geothermal power, to create environmentally sustainable digital infrastructure.

Expected Outcomes and Transformation Goals

Immediate Impact Objectives

By focusing on public institutions, the government intends to immediately demonstrate the value of connectivity through improved telehealth, online education, and more efficient public administration. The initiative targets over 70% of Kenya’s population that resides in rural and underserved areas, potentially transforming service delivery in remote regions.

The project aims to create immediate economic opportunities through improved access to digital services, e-commerce platforms, and remote work capabilities that could reduce rural-urban migration pressures.

Long-term Digital Transformation

The broader KDEAP framework envisions comprehensive digital transformation across multiple sectors. The initiative seeks to increase last-mile connectivity by expanding fiber backbone coverage and will concentrate on building a data-driven and secure environment for enhanced digital service delivery and innovation during its second phase (2026-2030).

The program’s ultimate goal is to make Kenya’s growth more equitable by shrinking disparities in digital skills and connectivity and expanding the digital marketplace, positioning the country as a model for inclusive digital development in Africa.

Challenges and Risk Mitigation

Infrastructure and Capacity Constraints

Despite the project’s ambitious scope, significant challenges remain. The persistent digital divide in access to broadband, digital public services, and digital literacy skills requires comprehensive intervention beyond infrastructure deployment alone.

People living with disabilities, the elderly, and those with limited schooling face greater digital exclusion, necessitating targeted inclusion programs alongside infrastructure development.

Sustainability and Maintenance

The long-term success of the rural broadband initiative depends on sustainable operation and maintenance models. The three-year framework agreements, extendable for two additional years, provide operational continuity, while the World Bank’s governance framework ensures accountability and performance monitoring.

Conclusion

Kenya’s $390 million rural broadband tender represents a transformative opportunity to bridge the digital divide that has historically separated urban and rural Kenya. By leveraging World Bank financing, international expertise, and Kenya’s established position as East Africa’s technology leader, this initiative promises to extend digital opportunities to over 1,000 rural institutions and the communities they serve.

The project’s success could serve as a model for rural digitization across Africa, demonstrating how strategic public investment, international partnership, and robust governance frameworks can accelerate inclusive digital transformation. As David Mugonyi, Director General of the Communications Authority of Kenya, emphasized: “Bridging urban-rural and social gaps is critical for equitable national development.”

With bids due October 1 and construction beginning January 2026, Kenya stands poised to take a significant step toward realizing its vision of universal digital inclusion and technological prosperity for all citizens.

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By: Montel Kamau

Serrari Financial Analyst

22nd August, 2025