Kenya Looks To China For $3bn Infrastructure Loan

The Government of Kenya is seeking a loan of Sh370 billion from China in order to complete the third phase of the standard gauge railway (SGR). 

The first phase of the project to link Mombasa and Nairobi cost Sh327 billion, with the second phase costing Sh150 billion. While the amount required for the third phase unconfirmed sources suggest it will be the most expensive yet. Among the factors driving up the costs are security concerns on the route. 

According to China’s Charge d’affaires Li Xuhang the finance is likely to be provided in the form of concessional and hard loans. Xuhang also revealed that the railway earned $100 million in the last financial year, claiming that the project had created more than 50,000 jobs locally and boosted growth by 1.5 per cent. Among those employed by the SGR, 2,723 are Kenyan as compared with 828 internationals he also stated. 

However, concerns have been raised surrounding issues of loan repayment.