Active Development AidData Chinese Aid

China pledges to provide KES 2.8 billion interest free loan — via ETCA — to fund unspecified technical and economic cooperation projects in Kenya in August 2013

$21.54M USD

Funder	China Ministry of Commerce
Recipient Organization	Government of Kenya
Country	Kenya
Start Date	Aug 01, 2013
End Date	Oct 05, 2033
Duration	7,370 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`31294`

Grant Description

China pledges to provide KES 2.8 billion interest free loan — via ETCA — to fund unspecified technical and economic cooperation projects in Kenya in August 2013 During President Uhuru Kenyatta's trip to China in August 2013, Chinese officials offered an interest-free loan of KES 2.8 billion (equivalent to USD 33.46 million) to be given to Kenya within five years from September 1, 2013.

The loan would have a repayment period of 10-years, with payments beginning in 2023. The loan would be used for technical and economic cooperation projects which would be agreed upon at a later date.

The projects, however, would remain subject to approval by the Kenyan Parliament which indicated the possibility of rejecting or cancelling certain projects.

📋 Staff Comments

AidData assumes that the pledged financing would come through an Economic and Technical Cooperation Agreement (ETCA). These agreements represent financial commitments from China's Ministry of Commerce (MOFCOM) and normally involve the provisions of grants or interest-free loans with the following terms: five-year drawdown period, five-year grace period, and repayment over 10-years with a total maturity period of 20-years. Such agreements are only extended to sovereign governments.
ETCAs are typically denominated in RMB. Thus, while underlying sources only report the USD and KES-equivalent values of the pledged loan, if an ETCA agreement were to be signed, the loan would be denominated in RMB.

📚 Sources & References

Kenyan opposition MPs question value of president's China trip
Chinese Prime Minister “Fruitful” Visit to Kenya, 2017 Chinese Enterprises in Kenya Social Responsibility Report
Premier Li Keqiang Meets with President Uhuru Kenyatta of Kenya
Kenyan President Seeks Ally on Trip to China Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.