China Eximbank provides $104.4 million preferential buyer's credit for Nairobi Northern and Eastern Bypass Project

Project narrative

On December 15, 2008, China Eximbank and the Government of Kenya signed a $108 million preferential buyer's credit (PBC) agreement for the Northern and Eastern Bypass Project. The face value of the loan was subsequently revised to $104,400,000. The borrowing terms of the loan were as follows: a 2% interest rate, a 7-year grace period, and a 20-year maturity. The loan was scheduled for semi-annual repayment in equal installments between January 30, 2015, and January 21, 2029. The borrower was expected to use the proceed of the loan to finance 85% of the cost of a RMB 740 million commercial (EPC) contract with China Road and Bridge Corporation (CRBC). The borrower made principal repayments worth $3,600,000 between July 1, 2020 and June 30, 2021 and $7,200,000 between July 1, 2021 and June 30, 2022. The loan’s amount outstanding was $64,800,000 as of June 30, 2020, $57,600,000 as of June 30, 2021, and $50,400,000 as of June 30, 2022. The project sought to build a 52 km road in Nairobi. The project supported a 21 km northern bypass segment and a 31 km eastern bypass segment. The northern bypass road starts in a neighborhood called Ruaka, approximately 16 kilometres (10 mi), north-west of the central business district of Nairobi, the capital and largest city of Kenya. From there, the road travels in a general easterly direction through Runda. It briefly crosses into Kiambu County, passes underneath Kiambu Road, re-enters Nairobi County and continues to a neighborhood called Marurui. At Marurui, the road takes a north-easterly direction, crosses Kamiti Road, then passes through Kahawa and re-enters Kiambu Couty, to end at the Nairobi Eastern Bypass Highway in Ruiru. The eastern bypass road starts at the junction of the Nairobi–Mombasa Road and Airport North Road, in Embakasi, immediately west of Nairobi International Airport, approximately 12 kilometres (7 mi) south-east of the city centre.The road then loops through the south-eastern suburbs of Nairobi, skirting the northern edges of Jomo Kenyatta International Airport, through Ruai. The road then crosses from Nairobi County, into Kiambu County and then turns westwards, passes underneath the Thika Highway and ends at the Ruiru Kamiti Road, at a place called Ruiru Road Junction. CRBC was the contractor responsible for implementation. Construction on the Bypass Project began on April 18, 2009. The project was completed and delivered to Kenya Urban Roads Authority on March 30, 2012. The project aimed to build a 53 km road in Nairobi. The project consisted of a 21 km northern bypass segment and a 32 km eastern bypass segment.