China Eximbank provides RMB 438 million government concessional loan for Nation Wide Remote Sensing Airborne Geophysical Survey Project

On August 14, 2013, Kenya's Cabinet Secretary for Tourism & Wildlife Najib Balala signed an MOU with Eng Jia Xuetian, President of China's Geological Exploration Technology Institute (GETI) for a nationwide remote sensing, airborne geophysical survey. A commercial contract was then signed on May 19, 2014 for an aerial survey that was expected to result in the creation of a geological map of Kenya's mineral resources (in order to make it easier for investors to make investments in the mineral sector). On August 31, 2017, China Eximbank and the Government of Kenya's Ministry of Mining signed an RMB 438,000,000 government concessional loan (GCL) agreement for the Nation Wide Remote Sensing Airborne Geophysical Survey Project. The loan carries a maturity of 17 years (final maturity date: September 21, 2034). Its other borrowing terms are unknown. No loan disbursements or principal repayments took place between July 1, 2020 and June 30, 2022 (Fiscal Year 2020-2021 or 2021-2022). The loan’s amount outstanding was zero as of June 30, 2021 and June 30, 2022. The purpose of the project was to undertake multispectral remote sensing, aeromagnetic, and radiometric survey in combination with satellite imagery studies as well as upgrading of geological services in Kenya with a view to determining the mineral potential of the country. The mapping was to be carried out of the country’s entire area of 582,650 square kilometers using aeromagnetic and radiometric methods after which the geophysical testing will be carried out to verify the resources available. An aerial survey was supposed to compile a new geological map detailing the occurrence of minerals around the country that would help spur investment in the mining sector. Part of the components of the airborne survey include; five magnetic maps, five radiometric maps and five electromagnetic maps. Geological Exploration Technology Institute (GETI) of Jiansu Province was the contractor responsible for project implementation. However, in 2018, the Kenyan Government froze its contract with GETI after mining stakeholders protested that entrusting the survey to the Chinese could result in manipulated and compromised data. Kenya's National Intelligence Service was then brought onboard to manage, co-ordinate and supervise the project. This development followed reports from two consulting firms -- UK-based International Geoscience Services (IGS) and the Canadian firm Paterson, Grant & Watson Limited (PGW) -- that GETI was not suited for the job in addition to concerns about data privacy. GETI has reportedly billed the Government of Kenya for 2 billion Ksh, equivalent to 30% of the value of its contract. Some reports suggest that China Eximbank cancelled its loan agreement with the Government of Kenya in late-2018. However, it appears that the loan agreement and the project were either not cancelled or cancelled and reinstated at a later date because (a) the August 31, 2017 China Eximbank loan agreement is included in the June 2021 version of the Government of Kenya’s external public debt register, and (b) official media sources in China and Kenya extensively covered the launch of the the final report of the nationwide airborne geophysical survey on June 21, 2022.

Additional details

1. The transaction amount was initially recorded as $112 million in the Kenya Electronic Project Monitoring Information System (eProMIS); however, other sources report that the value of the loan agreement was 7 billion Ksh. MOFCOM reports that the face value of the loan was RMB 440 million. AidData relies on the face value of the loan that is recorded in the Government of Kenya’s external public debt register (RMB 438,000,000). 2. The loan identification number in the Government of Kenya’s external public debt register is 2017041_1. 3. The Chinese project title is 肯尼亚矿产勘测项目. 4. In the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021, this project is coded as ‘completed’ and the face value of the loan is identified as $68 million. 5. The amounts outstanding, disbursements, and repayments 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

7

Number of total sources

26