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Government signs deal to unlock Sh6b Chinese loan

BUSINESS
By - | June 29th 2012

By James Anyanzwa

The Government has signed a framework agreement with the Chinese Government with hopes of unlocking an additional Sh6 billion concessional loan to finance the National Fibre Optic Backbone Infrastructure (NOFBI) and e-government expansion project.

China is one of the major donors whose cumulative official development assistance to date amounts to Sh109.43 billion.

Early this month the Government signed a loan agreement with the Export-Import Bank of China amounting to Sh31 billion for the Olkaria Geothermal Field Production Wells Drilling and Supply of Drilling materials project.

Finance minister Robinson Githae said the signing of the framework agreement would pave way for the signing of the loan agreement whose draft is under review by the two governments.

In a speech read on his behalf by Permanent Secretary Joseph Kinyua, Githae noted that the proceeds of the framework agreement would be specifically applied for the construction of fiber links to connect Nairobi City with former provincial headquarters to the core ring network.

He said, via broadband, the fiber links would also connect 36 administrative districts.

“Once completed, the project would provide a safer, more reliable, stable and efficient basic communication network for the Government and the Kenyan citizens,” Githae told reporters at the Treasury offices in Nairobi yesterday.

Githae said implementation of the proposed project would improve the quality of the public service delivery and improve the decision. Githae called for further support from the Chinese Government in the implementation of the Lamu Port Southern, Sudan, and Ethiopia Transport Corridor (Lapsset) project.

Infrastructure projects

The Lapsset project entails development of the country’s second port at Lamu and its associated infrastructure – roads, pipeline and railway.

 He said the Government would also be counting on China to help in mobilizing resources required to fund the implementation of the new constitution.

“ There are still challenges in mobilizing adequate resources to finance the devolved county Governments. We sincerely hope we can count on the support of all our friends, including the Government of China in meeting these challenges,” said Githae.

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