China Eximbank provides RMB 1.19 billion government concessional loan for Western Bypass Project

Project narrative

On September 4, 2018, during the Forum on China-Africa Cooperation (FOCAC), the Export-Import Bank of China and the Ministry of Finance of Kenya signed an RMB 1,190,253,600 government concessional loan (GCL) agreement for the Western Bypass Road Project. The borrower is responsible for repaying the loan between September 25, 2025 and March 21, 2038, which implies a loan maturity length of 19.5 years and a grace period of 7 years. The proceeds of the loan are to be used by the borrower to finance a commercial (EPC) contract with China Road and Bridge Corporation (CRBC). According to the Government of Kenya’s External Public Debt Register, the loan disbursed RMB 172,583,320.45 between July 1, 2020 and June 30, 2021 (in Fiscal Year 2020-2021) and RMB 504,859,536.18 between July 1, 2021 and June 30, 2022 (in Fiscal Year 2021-2022). No principal repayments were made between September 4, 2018 and June 30, 2022. The loan’s amount outstanding was RMB 174,180,942.31 as of June 30, 2020, RMB 346,764,262.76 as of June 30, 2021, and RMB 851,623,798.94 as of June 30, 2022. The purpose of the project is to construct a 16.358 km bypass road (dual carriageway) from Gitaru to Ruaka. The road begins at Gitaru on the Nairobi-Nakuru highway and connects with the Southern Bypass in Kikuyu town. It ends at Ruaka where it will connect to the Northern Bypass. The road was deigned as a Class A National Trunk Highway with 4 lanes and median strip. The Design Speed is 80km/h and the width of subgrade is 21m wide. The length of the main alignment of this project is 16.358km, with 17.351 km service roads (excluding ramps). The starting point of the alignment is connected to the end of the Southern Bypass of Nairobi City, intersected with A104, with a full cloverleaf interchange located at the intersection. The road mainly follows along the old alignment towards the northeast. The end of the alignment is located at Ruaka town, connecting the starting point of the Northern Bypass, and a single-trumpet interchange is set at Km14+813, connected with Limuru Road. Passing several large towns such as Wangige, Ndenderu and Ruaka etc., the road provides convenience for several large population centres along the line, with interchanges set at Km0+855, Km4+851, Km7+865, Km10+000, Km12+600, Km14+813, respectively. Pedestrian barriers will be installed in the midst to ensure that no pedestrian crossings occur at the non-authorized areas. The project also involves the construction of major interchanges at Dirt (Kwa Magu), Wangige, Ndenderu, Kihara, Rumingi and Ruaka. CRBC is the EPC contractor responsible for implementation and Kenya National Highways Authority (KENHA) is responsible for supervising its work. Construction began on March 15, 2019 and the project was originally expected to reach completion by the end of 2021. As of November 2021, the project had achieved an 80% completion rate. As of May 2022, the project had achieved a 99% completion rate. The project was ultimately completed in August 2022. According to the Kenyan Auditor General's 2023-24 report, in March 2022 KENHA and CRBC signed a contract for additional works valued at Kshs.815,740,720. The auditor general found that 64.1% of the additional works had been completed by September 2024. However, only Kshs.41,250,000 had been paid which resulted in CRBC "suspending works and abandoning site." The project is now subject to litigation. The implementation of the project has reportedly created about 2,000 direct jobs for locals. Traders dealing with cement, steel and other crucial raw materials have also reportedly benefited from the construction of the road.