Narrative
Full Description
Project narrative
On February 14, 2017, China Eximbank and the Government of Kenya signed a $134,967,400 buyer’s credit loan (BCL) agreement for Phase 2 of the Technical And Vocational Training Laboratories (TIVET) Project. The BCL carried a 16 year maturity (final maturity date: January 21, 2033) and a 2% interest rate. It was scheduled for repayment over 10 years in 20 (equal) semiannual installments (implied grace period: 6 years). The loan is backed by a Sinosure credit insurance policy. The borrower was expected to use the proceeds of the BCL to finance approximately 85% of the cost of a commercial (EPC) contract [agreement number AVIC/KEZ/13M5077] between the Government of Kenya’s Ministry of Education, Science and Technology (肯尼亚高教部) and Avic International Holding Corporation (中航国际), which was signed on September 5, 2013 and amended on May 25, 2016. The original cost of the commercial contract was $284,068,659. However, this figure was later revised to $166,618,659 via Addendum No 1 to the contract. The contract value was then further revised to $158,785,183 via Addendum No 2 dated May 25, 2016, after the Government of Kenya opted to undertake the civil works itself, thereby leaving the supply, installation, and commissioning of the equipment as well as human capacity building to Avic International Holding Corporation. Loan disbursements worth $1,701,510.65 took place between July 1, 2020 and June 30, 2021 (Fiscal Year 2020-2021). Loan disbursements worth $7,853,131.60 took place between July 1, 2021 and June 30, 2022 (Fiscal Year 2021-2022). The loan’s amount outstanding was $122,240,957.30 as of June 30, 2020, $123,942,467.95 as of June 30, 2021, and $131,795,599.55 as of June 30, 2022. Under the project, Avic International Holding Corporation is responsible for equipping 134 institutions of technical, vocational education, and training across the country. 1,500 teachers are to be sent to the field and 150,000 students are to be trained by 2020. Under the terms of the Government of Kenya's contract with Avic International Holding Corporation, all equipment was to be delivered before the closure of the contract on March 20, 2020.
Staff comments
1. Some media sources imply that the scheduled project completion date was 2022. 2. This China Eximbank loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. Nor is it included in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020. 3. This project is also known as Technical & Vocational Training Laboratories Project and Phase 2 of the Kenya-China Technical And Vocational Training Laboratories (TIVET) Project. The Chinese project title is 中肯职业教育项目 or 中肯职业教育合作项目 or 肯尼亚职业教育项目 or 肯尼亚职业大中专升级改造项目. 4. The project identification number in the Government of Kenya’s Electronic Project Monitoring Information System (eProMIS) is 2017/056607. The eProMIS reference identification number is 2017001voc. 5. The identification number for this China Eximbank loan in the Kenyan National Treasury’s public debt register is 2017010 (2017010_1). 6. The Kenyan National Treasury’s public debt register identifies the loan’s interest rate as 2%. However, BCLs are typically tether to LIBOR plus a margin. Therefore, this issue warrants further investigation. 7. Record ID#46982 captures China Eximbank loan for the TIVET project’s first phase. 8. 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 9. This record has been marked as having evidence of financial distress because it was part of the debt restructuring agreement captured in record #92668.