China Eximbank provides $194.7 million buyer's credit loan for Phase 1 of Kibwezi-Mutomo-Kitui (B7) Highway Project (Linked to Project ID#53111)

On November 28, 2016, China Eximbank signed a $194,740,598.46 buyer's credit loan agreement [NO. BLA2016K001] with the Government of Kenya for Phase 1 of the Kibwezi-Mutomo-Kitui (B7) Highway Project. The BCL carries the following borrowing terms: a 15.5 year maturity (final maturity date: July 21, 2032) and a 3% interest rate. The proceeds of the BCL are to be used by the borrower to partially finance a 23,394,790,000 Ksh (approximately $230 million) commercial contract with China Hydropower International Co., Ltd. The lender made disbursements worth $156,960,922.36 prior to July 1, 2021 and disbursements worth $37,195,454.30 between July 1, 2021 and June 30, 2022 (Fiscal Year 2021-2022). The loan’s amount outstanding was $156,960,922.36 as of June 30, 2020, $156,960,922.36 as of June 30, 2021, and $194,156,376.66 as of June 30, 2022. Phase 1 of the project involves the tarmacking of the 192 km, B7 highway. The highway begins at the junction with A8 (Nairobi-Mombasa road) near Kibwezi town and runs in a northward direction via Ikutha, Mutomo, Kitui, Kabati and ends at Migwani. Upon completion, it is envisioned that this highway will encourage development of critical infrastructure facilities such as power, water, telecommunications, and social infrastructure in the regions traversed as well as support the long term development and viability of the Mombasa-Isiolo-Moyale corridor, and Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor, while linking three more regional transport corridors which are the Northern Corridor (A8), the Kenya-Ethiopia Corridor (A2) and the Thika-Garissa-Liboi (A3). China Hydropower International Co., Ltd (中水电国际公司) -- also known as Sinohydro -- is the contractor responsible for project implementation. The Kenya National Highways Authority is responsible for overseeing its work. Construction began on December 6, 2016. The project had achieved a 53% complete rate as of May 2019. Its originally expected completion date was February 15, 2021. However, the project has encountered major implementation delays due to land acquisition challenges, the relocation of power line alongs the road corridor, delayed payments, a shortage of water for the works, and a temporary suspension of work by contractor due to COVID-19 cases reported in Kitui. Local residents have also complained about the noise, dust, and pollution that has resulted from construction activities.

Additional details

1. This is a subsidiary project supported by the 50 billion Ksh loan (captured via Project ID#53111). The purpose of the 50 billion Ksh (approximately $490 million) agreement signed on November 29, 2016 is to support three highway sections in three phases. The Kibwezi-Mutomo-Kitui highway (基布韦济—穆托莫—基图依公路), the Kandwia-Tseikuru-Usueni-Mikinduri-Muriri highway (坎达维亚—特瑟库鲁—乌苏埃尼公路), and the Kitui-Mwingi-Kandwia Highway (基图依—姆温吉—坎达维亚公路). Phase 1, 192-km of the highway, is worth 23 billion Ksh, Phase II is 167 km, and Ptomo-Kitui Road to Bitumen Standard Project [E-Promis ID#56059 and MOTI0012016 project reference number] and one for a $206,134,747.16 Upgrading of Kibwezi-Mutomo-Kitui-Migwani Road (A9/B64) Project [E-Promis ID#2018/057235 and KeNHA/RD/1469/2016 project reference number]. It is unclear if these records refer to different projects, so for the time being we represent this project as being supported by a single China Eximbank loan. 2. The Chinese project title is 基布韦济至基图伊公路升级项目. 3. The loan identification number in the Government of Kenya’s public debt register is 2016052 (2016052_1). 4. The borrowing terms of the loan are not identified in the database of Chinese loan commitments that SAIS-CARI released in July 2020. AidData records both the maturity (15.5 years) and the interest rate (3% interest rate) that are captured in the Government of Kenya’s external public debt register. 5. The amounts outstanding and disbursements data are drawn from the Kenyan Treasury’s External Public Debt Register. See https://www.dropbox.com/s/549ixt2gj1jbjvi/External-Public-Debt-Register-as-at-End-June-2022.pdf?dl=0 and https://www.dropbox.com/s/0et4jg1qfg1bo7r/External-Public-Debt-Register-as-at-End-June-2021.pdf?dl=0 and https://www.dropbox.com/s/233j706743q7f1g/External-Public-Debt-Register-as-at-End-June-2020.pdf?dl=0 and https://www.dropbox.com/s/qkoybr9ja0ohemy/External-Public-Debt-Register-as-at-End-June-2009.pdf?dl=0 and https://www.dropbox.com/s/thy3s6ggjcjd97z/External-Public-Debt-Register-as-at-End-June-2012.pdf?dl=0 and https://www.dropbox.com/s/fzbfq01vas6m0i9/External-Public-Debt-Register-as-at-End-June-2019.pdf?dl=0 and https://www.dropbox.com/s/ennrl6d4zd2nizs/External-Public-Debt-Register-as-at-End-June-2018.pdf?dl=0 and https://www.dropbox.com/s/8ibazrj1a8oho2d/External-Public-Debt-Register-as-at-End-June-2017.pdf?dl=0 and https://www.dropbox.com/s/wdbjl0wq49i09x1/External-Public-Debt-Register-as-at-End-June-2015.pdf?dl=0

Number of official sources

17

Number of total sources

30