Treasury Principal Secretary Chris Kiptoo has confirmed that Kenya already settled the Ksh 72 billion loan associated with the Standard Gauge Railway (SGR).
The PS made this confirmation while responding to Narok Senator Ledama Ole Kina who raised fears concerning the issue saying that Kenya was likely to default the debt payment.
Senator Ledama had called for the attention of PS Kiptoo noting that the loan needed to be paid.
“$450,000,000 (Ksh 72 billion) Chinese loan for the SGR and Northern and Southern Bypass must be paid tomorrow. The Chinese have sent a demand note,” Ledama stated.
In a quick rejoinder, the PS assured the government’s commitment to repay all debts when they are due.
“We already settled this debt as we shall do for many others as and when they fall due,” said the PS.
The loan in question was advanced to Kenya for the construction of the Standard Gauge Railway (SGR) and other infrastructure projects undertaken by the previous administration.
However, PS Kiptoo did not disclose whether or not the demand note alleged by Senator Ledama was what had prompted the government to act.
Standard Gauge Railway Project
The SGR project was commissioned as part of Kenya’s Vision 2030 development agenda.
Its construction officially began in late 2013 under the leadership of the China Road and Bridge Corporation (CRBC) a subsidiary of China Communications Construction Company (CCCC).
The first phase of the SGR, connecting Mombasa and Nairobi was completed and launched on May 31, 2017.
This marked a significant milestone in Kenya’s transportation infrastructure providing a faster and more efficient mode of transportation between the coastal cities and the capital city.
Subsequently the second phase extending the line to Naivasha was inaugurated on October 16, 2019.
SGR aimed to enhance connectivity, reduce travel time, and facilitate the movement of goods and people within the country.
SGR Loan Repayment
Likewise, the financing of the SGR project involved substantial loans from China Exim Bank.
The repayment terms and schedule have been a subject of discussion and scrutiny.
Over the years since the project was first commissioned, Kenya had made progress in repaying portions of the loan, with periodic negotiations and adjustments to ensure financial sustainability.
However, going by the National Treasury Principal Secretary’s Saturday statement it is safe to say that the Ksh 72 billion loan has been cleared.
China Kenya’s Biggest Lender
China is the largest lender to Kenya having financed multibillion projects including the SGR which was constructed at a cost of Ksh508 billion (USD3.2 billion)
On the other hand, the Southern Bypass in Nairobi cost Ksh 16.9 billion while the Northern Bypass was to cost Ksh8.5 billion.
The Chinese government-funded 85 per cent of both the Northern and Southern Bypass project.
With China financing most of Kenya’s infrastructure projects, Kenya is expected to continue borrowing from the Asian economic powerhouse.