- International lenders are cutting back on funding for some of Kenya’s infrastructural projects.
- Financial cutbacks may get as high as Sh66.8 billion.
- Some of the foreign lenders include the World Bank, China Exim Bank, and more.
At least 19 significant projects in Kenya have been impacted by changes in government expenditure, with foreign lenders cutting financing for the fiscal year ending June by at least Sh66.8 billion.
This report coming from Business Daily, a Kenyan business publication, shows that drawbacks from funding would affect infrastructural projects the most.
Global lenders such as the World Bank and the African Development Bank (AfDB) have reduced funding for road and energy infrastructure projects, causing President William Ruto’s government to shelve or postpone their completion.
The China Exim Bank, for example, has docked the Kamburu-Embu-Thika Transmission Line Sh4.5 billion, one of the steepest cutbacks.
The AfDB has wasted Sh3.15 billion on building the 1,045 km 500 kV High Voltage Direct Current (HVDC) transmission line that tries to connect Kenya and Ethiopia grids, known as the Eastern Electricity Highway Project (Ethiopia-Kenya Interconnector).
The World Bank’s financing for a project aimed at increasing electricity availability by lowering construction costs has been reduced by Sh2.9 billion, while the Gilgil-Thika Konza 400 KV Transmission Line has lost Sh2.3 billion.
Kenya has relied on foreign loans to update old power lines and boost the availability and quality of energy to satisfy the increased demand from a rising population and promote economic growth.
This report is contrary to a few reports from Construction Kenya (CK), a dedicated site for Kenyan projects. On CK’s official site, there have been a couple of reports showing foreign investment in Kenya’s project including, the report that Globeleq, a London-based power producer, has inked financial agreements with numerous investors to enable the development of a 35MW geothermal power plant near the Menengai Crater in Nakuru County.
Also, the World Bank’s International Finance Corporation (IFC) pledged Sh40 billion ($320 million) in financing for the Sh190 billion Nairobi-Mau Summit Highway, in a move that is likely to unlock more funding for the project. Although this may be one of the projects affected.
