Treasury Cabinet Secretary John Mbadi has revealed that the Kenyan government is actively seeking a Ksh 72 billion loan from China to finance major road construction projects.
The loan will fund road projects like the 124-kilometer highway linking Kenya and Tanzania. Funding will also support other road projects within Kenya, including those in the Rift Valley and Lake Victoria basin regions.
The move comes as an alternative to delays experienced with funding from the World Bank. The construction of the 124-kilometre highway was planned to be financed by the Bretton Woods institution.
“So these roads were meant to be funded by the World Bank, but yesterday we told China about our plan to construct additional roads. We sought Ksh72 billion from China for the roads,” Mbadi noted
CS Mbadi also mentioned that the two loans from China and the World Bank would be concessional, meaning they offer more favourable terms than standard commercial loans. He indicated that the government will negotiate with China to secure the best interest rate, which would be below 4 percent.
The East African country has faced obstacles in financing development initiatives, hampered by sluggish growth in tax revenues, mounting debt obligations, and rising spending needs, including those from its 47 county governments.
The government is actively exploring various funding sources to ensure the completion of essential infrastructure projects. Multiple deals have also been made with China for the construction of rural roads.
