China Eximbank provides RMB 37.4 million government concessional loan for Procurement of Power Line Materials Project

Project narrative

On December 24, 2007, China Eximbank signed an RMB 38,980,000 government concessional loan (GCL) agreement [CHINA EXIMBANK NO GCL 214] with the Government of Kenya for the Procurement of Power Line Materials Project. The face value of the loan was subsequently revised to RMB 37,472,202.35. The loan was provided with the following borrowing terms: a 2% interest rate, a 7.75 year grace period, and 20.25 year maturity. It was scheduled for repayment in semi-annual installments from September 21, 2015 to March 21, 2028. The Government of Kenya, in turn, on-lent the vast majority of the proceeds of the loan (RMB 35,091,106) to a Kenyan a state-owned enterprise called Kenya Power and Light Corporation (KPLC). The ultimate borrower (KPLC) was expected to use the loan proceeds to finance a commercial contract with Hexing Electric Co., Ltd. (HECL). The subsidiary loan from the Kenyan Government to KPLC carried a 2.5% interest rate and a 20 year maturity. The borrower made principal repayments worth RMB 1,498,888 between July 1, 2020 and June 30, 2021 and RMB 2,997,776.09 between July 1, 2021 and June 30, 2022. The loan’s amount outstanding was RMB 23,982,209.50 as of June 30, 2020, RMB 20,984,433.31 as of June 30, 2021, and RMB 17,986,657.13 as of June 30, 2022. The purpose of the project was to acquire and install 400,600 electronic meters and other power line materials. Hexing Electric Co., Ltd. (HECL) was the contractor responsible for project implementation. In 2008, after KPLC signed a KES 230 million commercial contract with Hexing Electric Co., Ltd. (HECL) for the acquisition of electronic meters, 150,000 meters were delivered. The remaining meters were originally expected to be delivered by June 2009. However, the precise commencement and completion dates of the Procurement of Power Line Materials Project are unknown.