China Eximbank provides $319.8 million loan — via EPC+F arrangement — for 400KV Gilgil-Thika-Nairobi East-Konza Transmission Line, 400KV Loiyangalani-Marsabit Transmission Line & 220KV Isiolo-Marsabit Transmission Line Construction Project

On May 12, 2015, China International Water & Electric Corporation and the Government of Kenya’s Ministry of Energy and Petroleum signed a Memorandum of Understanding (MOU) on the 400KV Gilgil-Thika-Nairobi East-Konza Transmission Line, 400KV Loiyangalani-Marsabit Transmission Line & 220KV Isiolo-Marsabit Transmission Line Construction Project. Then, on May 16, 2017, China Eximbank, China International Water & Electric Corporation (CWE) and the Government of Kenya signed a $319,827,810 Engineering, Procurement, Construction and Financing (EPC+F) agreement for the 400KV Gilgil-Thika-Nairobi East-Konza Transmission Line, 400KV Loiyangalani-Marsabit Transmission Line & 220KV Isiolo-Marsabit Transmission Line Construction Project. The loan carries a 16.25 year maturity (final maturity date: July 21, 2033). The other borrowing terms of the loan are unknown. However, it is known that the borrower was expected to use the loan proceeds to finance approximately 86% of the cost of a $370,048,000 commercial (EPC) contract between China International Water & Electric Corporation and the Government of Kenya’s Ministry of Energy and Petroleum, which was signed on May 26, 2016. The loan did not disburse between July 1, 2020 and June 30, 2021 (Fiscal Year 2020-2021). Nor did it disbursed between July 1, 2021 and June 30, 20220 (Fiscal Year 2021-2022. There was no amount outstanding under the loan as of June 30, 2021 and June 30, 2022. The purpose of the project is to construct (1) a 250 km, 400KV transmission line from Gilgil to Konza via Thika and Nairobi East (‘Lot 1’); (2) a 180 km, 400KV transmission line from to Loiyangalani to Marsabit (‘Lot 2’); and (3) a 306 km, 220KV transmission line from Isiolo to Marsabit (‘Lot 3’). Lot 1 involves the construction of a 250 km, 400kV transmission line in (3) sections: (a) a 113 km Gilgil-Thika section that originates from Gilgil and terminates at Thika and traverses Nakuru, Nyandarua and Kiambu counties, (b) a 21 km Thika-Nairobi East section that originates from a proposed substation located along Nairobi-Thika highway and between Juja and Thika town, and (c) a 65 km Nairobi East-Konza section originates from Malaa and runs through Machakos county to Konza Lot 2 involves the construction of a 180 km, 400KV transmission line from a proposed substation in Loiyangalani, Marsabit County to a proposed substation in Hula Hula. The line traverses through the Chalbi desert and Hula Hula and Kargi (two locations in Laisamis Sub-county). Lot 3 involves the construction of a 224 km double single circuit 220 kV overhead transmission line interconnection from a proposed 400 kV/220 kV Marsabit Substation to a proposed 220/132kV Isiolo substation. It also involves the construction of 20 km single circuit 132kV overhead transmission line interconnection from a proposed 220/132kV Isiolo Substation to an existing 132 kV Isiolo Substation. China International Water & Electric Corporation is the contractor responsible for project implementation. As of April 2022, AidData had not identified any evidence of project implementation.

Additional details

1. This project is also known as the Kenya Power Transmission Improvement Project and the Kenya Transmission Line Project. The Chinese project title is 肯尼亚输变电项目 or 肯尼亚输变电工程. 2. The Kenya Electronic Project Management Information System (e-ProMIS) project identification number is 2017/056988. The E-ProMIS project reference number is TRANS0032017. The loan identification number in the Government of Kenya’s external public debt register is 2017033_1. 3. Under most EPC+F contractual arrangements, a loan is extended to the EPC contractor but with a sovereign guarantee from the host government. Therefore, AidData assumes that the loan issued to CWE is backed by a repayment guarantee from the Government of Kenya (i.e. a sovereign guarantee). According to one official source (https://www.nema.go.ke/images/Docs/EIA_1330-1339/ESIA_1335%20%20Report%20for%20Gilgil-Thika-Nairobi%20East-Konza%20400kv%20T-Line_Feb.2017.pdf), ‘the project will be executed on EPC+F basis with financing from Chinese banks.’ 4. 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. 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

11

Number of total sources

14