China Eximbank provides $37 million loan for Phase 1 of NOBI Project (Linked to Record ID#47014 and #30384)

China Eximbank provides $37 million loan for Phase 1 of NOBI Project In 2007, China Eximbank and the Government of Kenya signed a $37 million loan agreement for Phase 1 of the National Optic Fibre Backbone Infrastructure (NOFBI).

However, it is known that the borrower was expected to use the proceeds of the loan to finance a commercial contract that it signed with ZTE Corporation Ltd. and Huawei Technologies Co. Ltd. in September 2007. Phase 1 involved the laying of 4,300 km of fiber optic cable to connect eight provincial headquarters and 53 towns.

The ultimate goal of the project was to provide universal high-speed Internet access. ZTE Corporation Ltd., Sagem Communications and Huawei Technologies Co. Ltd were the contractors responsible for project implementation. Phase 1 was completed between 2007 and 2009. However, it later became a major source of controversy.

A forensic audit published by Kenya’s Auditor General in 2022 identified NOFBI equipment that was faulty, idle, or disconnected from electricity.

It also noted that ‘[t]otal funding from Exim Bank of China could not be ascertained as the framework and concession loan agreements for Nofbi phase 1 were not provided for audit’ and that ‘the commercial contract for ZTE Corporation was not provided for audit and therefore [it was] not possible to establish the total cost of Nofbi phase 1.’ It also noteworthy that the China Eximbank loan for Phase of the NOFBI Project is not included in the Government of Kenya’s external public debt register.