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Kenya borrowed Sh340b in four months, says report

Treasury Cabinet Secretary Henry Rotich

The government borrowed  Sh340 billion between February 1 and June 30 this year, a report tabled in Parliament has revealed.

The National Treasury, according to the report, will be use the money to finance several development projects.

The report tabled by Leader of Majority Aden Duale on Wednesday shows the amount will come from the 29 loans signed between the government and bilateral, multilateral and commercial creditors.

The document notes that some Sh156 billion worth of the loans from commercial creditors— PTA Bank and a consortium of lenders comprising the Standard Chartered Bank, Standard Bank, CITI Bank and Rand Merchant bank—has already been disbursed.

Disbursements from other bilateral and multilateral lenders are expected over the medium term, the document states.

The report comes amid concerns over Kenya’s growing appetite for loans, with some pundits arguing that the country may be borrowing more than it can sustain. The National Treasury has dismissed the claims.

The money will mainly finance infrastructural projects, including roads, irrigation, water supply, energy, health and education according to Daily Nation.

The report is a requirement by the Public Finance Management Act that compels National Treasury Cabinet Secretary to update the National Assembly on all the new loans obtained from outside the country or denominated in foreign currency after every four months.

Irrigation and water supply projects include Sh2.3 bilion Ruiru II water supply funded by France and Sh20.8 billion Kenya Karimenu II Dam water project funded by Exim Bank.

Others are Kimwarer Dam at Sh4.3 billion, Arror Dam Trance I and II at Sh38.6 billion, funded by Intensa Sao Paulo of Italy, and water sanitation development project worth Sh30 billion.

Under the energy sector, the government intends to modernise Kenya Power distribution system and strengthen it at a cost of Sh7.6 billion and pump Sh8.8 billion into Kenya Power transmission expansion project.

The two projects funded by the Exim Bank of China seek to improve stability of electricity supply, lower the costs of transmission as well as that of doing business.

The Last Mile connectivity programme will be financed by France to improve the stability of electricity supply at a cost of Sh10 billion as well as the Sh3 billion Rabai- Kilifi transmission line to diversify and increase electricity generation.

In the roads sector, over Sh40 billion will be spent on the proposed North Eastern transport improvement project, Kapchorwa-Suam-Kitale and Eldoret bypass project and construction of Nairobi ICD Yard and access roads.

Others are the Kenya-South Sudan regional corridor as well as the Mombasa Port road access project.

The road projects will be financed by African Development Bank, African Development Fund and Exim Bank of China.

In the education sector, Sh14 billion from Exim Bank will finance the Kenya Technical and Vocational Training laboratories project with the Health sector getting Sh1 billion for cancer centre at Kisii Hospital.

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