Markets & Finance

China loans Kenya Sh16.9bn to build Southern by-pass

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Funding: Exim Bank to provide up to 85 per cent of the $183.6 million required for the project while the government of Kenya will provide 15 per cent of the funds. Photo/FILE

State-owned Exim Bank of China signed a Sh16.9 billion loan agreement to finance construction of the southern by-pass road project, adding to the long list of Chinese funded projects.

The Ministry of Finance Tuesday signed a preferential credit loan agreement with the lender for the road that is expected to run from St James Hospital on Mombasa Road to Kikuyu, off the Nairobi-Nakuru Highway.

The contract will see the Chinese bank provide up to 85 per cent of the $183.6 million required for the project while the government of Kenya will provide 15 per cent of the funds.

Once the road is completed, it is expected to ease traffic flowing into the city because vehicles travelling from the coast to Naivasha, Nakuru and all the way to Kisumu will be able to take the alternative route without necessarily coming through Nairobi.

City residents living along the road will also access Jomo Kenyatta International Airport by avoiding the traffic on Waiyaki Way and Uhuru Highway.

“The credit will be applied for the construction of the planned Nairobi Southern by-pass road project with a view to providing Nairobi City with an essential corridor for fast transit traffic, hence facilitating quick diversion movement of the urban traffic,” said Deputy Prime Minister and Minister for Fnance Uhuru Kenyatta.

Mr Kenyatta, who was speaking at the signing ceremony said the project will significantly contribute to the decongestion of the City of Nairobi which is currently experiencing heavy traffic jams due to inadequate roads and contribute to the improvement of Nairobi metropolitan area’s road network.

He said the Chinese government had so far given the country development assistance amounting to Sh58.962 billion.

The Chinese, who are building Thika Road, have been involved in past projects which include Moi Sports Centre, Kasarani, Moi Teaching and Referral Hospital, Rehabilitation and Widening of the JKIA – Uhuru Highway - UNEP Road, Mama Lucy Kibaki Hospital in Nairobi’s Eastlands area and the Kenya Power Distribution System Modernisation Strengthening Project, amongst others.

They are also involved in ongoing projects which include the Nairobi Northern and Eastern by- passes project, Olkaria IV Geothermal Field Production Wells Drilling Project and the Kenyatta University Teaching, Research and Referral Hospital.

Mr Kenyatta said ongoing projects are being implemented through Concessional and the Preferential Buyer Loan Credits from the Export Import Bank of China. The Chinese are also constructing the Nairobi Northern and Eastern bypasses which are 50 and 90 per cent complete.

Mr Kenyatta said the construction of the planned Nairobi Southern by-pass will complete the loop of the three bypasses easing traffic on Nairobi City roads.