Active Development AidData Chinese Aid

[Cancelled] China Eximbank provides RMB 1.2 billion loan for Nairobi Underground Electric Power Distribution Network (Kilimani, Hurlingham, Ngong Road, State House, and Lavington Areas) Project (Linked to Record ID#58661)

¥1.2M RMB

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Kenya
Country	Kenya
Start Date	May 15, 2017
End Date	Nov 11, 2032
Duration	5,659 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`58693`

Grant Description

[Cancelled] China Eximbank provides RMB 1.2 billion loan for Nairobi Underground Electric Power Distribution Network (Kilimani, Hurlingham, Ngong Road, State House, and Lavington Areas) Project On May 15, 2017, China Eximbank and the Ministry of Finance of Kenya signed an RMB 1,200,000,000 ($210,896,000) loan agreement for the Nairobi Underground Electric Power Distribution Network (Kilimani, Hurlingham, Ngong Road, State House, and Lavington Areas) Project.

The loan has a maturity length of 19.5 (final maturity date: September 21, 2036).

📋 Loan / Grant Terms

💰 Loan Amountare unknown

The proceeds of the loan were to be used by the borrower to finance a commercial contract between Kenya Power and Lighting Co. (KPLC) and China Shanghai (Group) Corporation for Foreign Economic & Technological Cooperation (SFECO), which was signed in February 2013. The lender had not made any disbursements as of June 30, 2022.

Nor had the borrower made any principal repayments as of June 30, 2022. The loan’s amount outstanding was zero as of June 30, 2021 and June 30, 2022.

The purpose of the project is to construct an underground electric power distribution network in the Kilimani, Hurlingham, Ngong Road, State House, and Lavington areas by, among other things, reinforcing underground high voltage lines. On October 31st, 2017, KPLC requested to change the scope of the project and was refused by the contractor.

However, the actual cancellation of the loan was delayed for a further five years until January 12th, 2023. This resulted in Kenya having to pay RMB 20,299,999.88 in commitment fees and RMB 6,000,000 in miscellaneous charges.

📋 Staff Comments

This project is also known as the Nairobi 11kv Underground Power Distribution Network Project. The Chinese project title is 内罗毕配电网改造（北部城区）和内罗毕配电网改造（西部城区）项目.
There are two sources (http://tjj.nanjing.gov.cn/tjxx/201802/t20180206_494659.html and http://www.hejiongj.com/knysc/14929.html) that suggest NARI Group Corporation may have also been involved in the implementation of this project.
This project is focused on the Kileleshwa, Westlands, Parklands, Ngara, and Riverside areas of Nairobi. Project ID#58661 captures a $128 million China Eximbank loan for underground cable upgrades in the Kileleshwa, Westlands, Parklands, Ngara, and Riverside Areas.
The project identification number in the Government of Kenya’s Electronic Project Monitoring Information System (eProMIS) is 2017/056987. The eProMIS reference identification number is TRANS0022017. eProMIS refers to the face value of the loan as $210,896,000.
There are some indications that this project may have been financed through an Engineering, Procurement, Construction and Financing (EPC+F) arrangement. Under a typical EPC+F contractual arrangement, a loan is extended to the EPC contractor but with a sovereign guarantee from the host government. If this arrangement was in effect, it would imply that the loan was issued to SFECO and backed by a repayment guarantee from the Government of Kenya (i.e. a sovereign guarantee). This issue warrants further investigation.
The loan identification number in the Government of Kenya’s external public debt register is 2017042_1.
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

📚 Sources & References

KENYA ELECTRICITY SECTOR INVESTMENT PROSPECTUS 2018 - 2022
PRESS BRIEFING BY STATE HOUSE SPOKESPERSON
MANOAH ESIPISU
ON THE PRESIDENT’S TRIP TO MALTA
FRANCE AND SOUTH AFRICA
KPLC Conducted Due Diligence on SFECO
SFECO signed a new contract of underground power distribution network in Kenya, 2017年南京市对外投资和经济合作呈现新变化
Export-Import Bank and Kenya Ministry of Finance Sign Foreign Aid Preferential Loan Agreement
肯尼亚内罗毕配电网改造项目优贷协议签订, e-ProMIS Kenya 056987 Full
Into Africa & Kenya Footprint of Export-Import Bank
The National Treasury Public Debt Management Office Summary Statement 2021/2022
肯尼亚电力代表团对外经集团进行项目尽职调查
SUMMARY STATEMENT OF PUBLIC DEBT FOR 2020/2021FY IN FOREIGN CURRENCY
AUDITOR-GENERAL'S SPECIAL AUDIT REPORT ON DEBT SERVICING OF EXTERNAL LOANS IN KENYA
EPRA Energy Scoop Bi-annual magazine for EPRA stakeholders Edition-1 2024 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.