China Kenya Loans: Trouble is brewing between Kenya and China over hundreds of billions in loan that the State got from the emerging super power. China has already frozen all active loans to Kenya due to ongoing struggle to repay debts and pleads for extension of repayment holidays. China had lent Sh. 758 billion to Kenya as at April 2021
This has left Chinese-funded projects facing a cash crunch, with contractors reporting delayed payments from banks like Exim Bank of China. Reports further say that executives at State-owned firms say the projects risk delays due to the funding hitch.
A report that appeared in the Business Daily on Friday said that Chinese lenders, especially Exim Bank, are uncomfortable with the terms of the Kenyan request for extension of the debt service suspension beyond June. The daily quoted a chief executive officer as saying that “payment to contractors working on Chinese projects and paid under direct method have delayed since last month. We are told Chinese banks are not settling invoice because of the moratorium.”
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However, Kenya has denied any knowledge on debt suspension by China. The report said that the National Treasury officials denied delays in release of Chinese loans, saying the country had received positive response from all countries where they sought an extension of the debt repayment relief. “Not true,” Finance Cabinet Secretary Ukur Yatani was quoted as saying on the China Kenya loans.