Kenya has signed a Sh. 17.4 billion loan from the government of South Korea to redesign road junctions within Nairobi. The new loan has been taken from the Korean Export and Import Bank. It will be serviced up until the year 2061.
This loan was applied for in January 2021. The loan is however yet to be disbursed to Kenya. Apparently, Kenya through the National Treasury signed two loans of Sh. 10.79 billion ($100 million) and Sh. 6.59 billion ($61 million) at an exchange rate of Sh. 107.85 to finance the Nairobi Integrated Transport System (ITS).
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“The loan will attract interested rate of 0.1 per cent per annum and a service charge of 0.1 percent per annum on undisbursed loan amount,” the National Treaury said in its disclosures. These two loans will be repaid in 60 semi-annual installments. Payments will kick off from July 20, 2031.
This is the latest in a string of huge loans the government has been taking to fund road projects in Nairobi. The loan comes at a time when the country is inching towards public debt worth over Sh. 8 trillion.
According to reports, this latest loan from the Korean Export and Import Bank will be allocated Ministry of Transport’s Integrated Transport System and Loop Line in the Nairobi Urban Core project. “The government commissioned Japan International Corporation Agency to undertake consultancy services for the design, tender documentation and implementation supervision of an intelligent transport system. The junction capacity assessment is aimed at identifying bottlenecks,” a report that appeared in a local daily said.