Kenya receives Sh2.36bn Saudi fund loan

Electricity09 September 2013, Nairobi – The Kenyan government at the weekend signed two loan agreements amounting to Sh2.36 billion($27 million) with Saudi Fund for Development for partial funding of two for roads and rural electrification.

The first Sh1.31 billion($15 million) will go towards the 146km Nuno-Modogashe road in Northern Kenya aimed at opening up the region that is 65 per cent dependent on livestock farming.

“The road will enhance livestock production and provide a stimulant to socio-economic activities in the region,” the Cabinet Secretary for National Treasury Henry Rotich said. ” It will facilitate access to basic services like markets, health and eduction and thus improve living standards.”

Its total cost is estimated at Sh8.75 billion($100 million). Kuwait Fund has committed Sh1.75 billion($20 million), OPEC Fund Sh1.05 billion($12 million) while Arab Bank for Economic Development in Africa and Abu Dhabi will extend Sh875 million ($10 million) each. Kenya will put in the remaining Sh 3.23 billion ($37 million).

The second Sh1.05 billion ($12 million) loan will co-finance construction of electricity transmission lines and sub-stations in five regions including Central, Eastern, Coast, Rift Valley and Western.

The other financiers of the Sh6.6 billion ($75.45 million) project under the rural electrification programme are BADEA and Abu Dhabi funds with a contribution of Sh875 million ($10 million) each.

OPEC Fund has also committed Sh1.31 billion ($15 million) while the government will foot the remaining Sh1.44 billion($16.45 million) bill.

The two loans will attract an annual percentage interest payable within 30 years, with a grace period of 10 years for road and six years for electricity. Rotich stressed that infrastructure will continue getting the lions share of public funds having been allocated 18 per cent of the Sh1.64 trillion budget for 2013/14 fiscal year.

– The Star

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