Completed Development AidData Chinese Aid

China Eximbank provides $194.7 million buyer's credit loan for Kibwezi-Mutomo-Kitui (B7) Highway Upgrade Project

$194.74M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Kenya
Country	Kenya
Start Date	Nov 28, 2016
End Date	Dec 29, 2033
Duration	6,240 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`53111`

Grant Description

China Eximbank provides $194.7 million buyer's credit loan for Kibwezi-Mutomo-Kitui (B7) Highway Upgrade Project On November 28, 2016, China Eximbank signed a $194,740,598.46 buyer’s credit loan (BCL) agreement with the Government of Kenya for the Kibwezi-Mutomo-Kitui (B7) Highway Project.

📋 Loan / Grant Terms

💰 Loan Amountinclude a 15

📅 Maturity15.655 years

💹 Interest Rate3%

The borrower was expected to use the proceeds of the loan to finance 85% of the cost of a $229 million commercial (EPC) contract cost with STECOL Corporation, which was signed in February 2011.

The lender made disbursements worth $156,960,922.36 prior to July 1, 2021 and loan disbursements worth $37,195,454.30 took place between July 1, 2021 and June 30, 2022 (Fiscal Year 2021-2022).

The loan's (principal) amount outstanding was $156,960,922.36 as of June 30, 2020, $156,960,922.36 as of June 30, 2021 and $194,156,376.66 as of June 30, 2022.

The purpose of the project was to upgrade the 191.71 km Kibwezi-Mutomo-Kitui (B7) highway (基布韦济—穆托莫—基图依公路), which is located in Eastern Province and connects Mombasa Road and A3 Road, The highway begins at the junction with A8 (Nairobi-Mombasa road) near Kibwezi town and runs in a northward direction via Ikutha, Mutomo, Kitui, Kabati and ends at Migwani.

The project scope involved upgrading existing roads to asphalt concrete pavement with a designed width of 11 meters, including the repair of roads in main towns and existing asphalt roads, 2 large parking lots (service areas), 2 overpasses, 10 river-crossing bridges, 214 pipe culverts, and 40 box culverts, as well as supporting facilities.

Upon completion, it was envisioned that the highway could encourage the development of critical infrastructure facilities -- such as power, water, telecommunications, and social infrastructure -- and support the long term development and viability of the Mombasa-Isiolo-Moyale corridor, and Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor, while linking three more regional transport corridors which are the Northern Corridor (A8), the Kenya-Ethiopia Corridor (A2) and the Thika-Garissa-Liboi (A3).

STECOL Corporation -- a subsidiary of Sinohydro -- was the contractor responsible for project implementation. The Kenya National Highways Authority supervised its work. Construction began in August 2017. The project had achieved a 53% complete rate as of May 2019. Its originally expected completion date was February 15, 2021.

However, the project has encountered implementation delays due to land acquisition challenges, the relocation of power line alongs the road corridor, delayed payments, a shortage of water for the works, and a temporary suspension of work by contractor due to COVID-19 cases reported in Kitui.

Local residents have also complained about the noise, dust, and pollution that has resulted from construction activities. The project was ultimately completed in June 2021.

📋 Staff Comments

The Chinese project title is 基布韦济至基图伊公路升级项目 or 肯尼亚基布韦济 - 乌苏埃尼（330 公里）公路项目.
The Kenya Electronic Project Monitoring Information System (eProMIS) identifies two different loans: one for a $212.8 million Upgrading of Kibwezi -Mutomo-Kitui Road to Bitumen Standard Project [E-Promis ID#56059 and MOTI0012016 project reference number] and one for a $206,134,747.16 Upgrading of Kibwezi-Mutomo-Kitui-Migwani Road (A9/B64) Project [E-Promis ID#2018/057235 and KeNHA/RD/1469/2016 project reference number]. It is unclear if these records refer to different projects. This issue warrants further investigation.
The loan identification number in the Government of Kenya’s external public debt register is 2016052.
The borrowing terms of the loan are not identified in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. AidData records both the maturity (15-years) and the interest rate (3% interest rate) of the loan.

📚 Sources & References

Liu Xianfa
Ambassador to Kenya, attended the signing ceremony of the Kenya Highway Upgrade Project Loan Agreement 驻肯尼亚大使刘显法出席肯尼亚公路升级项目贷款协议签约仪式
Kibwezi-Kitui Road is a game changer
Mofcom source
IJGlobal - Kibwezi-Mutomo-Kitui Highway (472KM) Phase 1 - Kenya
REPORT OF THE AUDITOR GENERAL FOR THE NATIONAL GOVERNMENT 2017 2018, e-ProMIS Kenya 056059 Full
Kenya signs agreement with China Exim Bank, e-ProMIS Kenya 057235 Full
Construction of Kenya’s Kibwezi-Mutomo-Kitui road 53% complete
驻肯尼亚大使刘显法出席肯尼亚公路升级项目开工仪式
Govt signs Sh23bn Chinese loan to build Kibwezi-Kitui road
公司正式签订肯尼亚输变电线路项目
Kenya signs $230 million Chinese loan to build Kibwezi-Kitui road
驻肯尼亚大使刘显法出席肯尼亚公路升级项目开工仪式
CONSULTANCY SERVICES FOR CONSTRUCTION SUPERVISION OF UPGRADING OF KIBWEZI – MUTOMO – KITUI – KABATI – MIGWANI ROAD (A9/B64)
Inside President Uhuru Kenyatta's Sh38 billion bag of road goodies
UPGRADING OF KIBWEZI – MUTOMO – KITUI (A9/B64) ROAD TO INTERNATIONAL TRUNK ROAD STANDARD ON COURSE
中国电建承建的肯尼亚“南北要道”升级项目开工
Sh. 18.4 Billion Kibwezi-Kitui Road Construction Ahead Of Completion Schedule
Kenya Signs Agreement With China Exim Bank
Kibwezi-Mutomo-Kitui Highway (472KM) Phase 1
Construction of Kenya’s Kibwezi-Mutomo-Kitui road 53% complete
External-Public-Debt-Register-as-at-End-June-2020.pdf
Sh3.1bn released for completion of Kibwezi-Kitui-Migwani-Mbondoni road
Senators lay bare locals' pain in Sh18bn Kitui road project
REPORT OF THE AUDITOR-GENERAL FOR THE NATIONAL GOVERNMENT
Gov’t Opens Road Linking Kitui-Makueni Counties
Government Fast-Tracking Land Acquisition And Compensation
Kitui Residents Hold Demos Over Delayed Compensation for Land Acquired During Kibwezi-Kitui Road Construction
Sh18.4 Billion Kibwezi-Kitui Road To Spur Socio-Economic Development
Government set to open road linking Kitui and Makueni counties
The National Treasury Public Debt Management Office Summary Statement 2021/2022
External Public Debt Register as at End June 2021
SUMMARY STATEMENT OF PUBLIC DEBT FOR 2018/2019FY, 2022 Best Practices of Sustainable Infrastructure. Projects
SUMMARY STATEMENT OF PUBLIC DEBT FOR 2020/2021FY IN FOREIGN CURRENCY 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.