Repayment of the SGR loan started in January 2020 after the lapse of a five-year grace period that Beijing had given Kenya.
Kenya tapped over half a trillion shillings from Chinese lenders, led by the Export-Import Bank of China, to fund the construction of the SGR from Mombasa to Naivasha. PHOTO | FILE | NMGKenya defaulted on repayment of the Chinese loans provided to build the standard gauge railway , highlighting the country’s struggles with the mounting public debt.
The Chinese banks fined Kenya Ksh1.312 billion in the year ended June for loan defaults, according to Treasury documents seen byKenya tapped over half a trillion shillings from Chinese lenders, led by the Export-Import Bank of China, to fund the construction of the SGR from Mombasa to Naivasha. Taxpayers have been forced to shoulder the burden of the SGR loans because revenues generated from the passenger and cargo services on the track are not enough to meet the operation costs, which stood at Ksh18.5 billion in the year to June against sales of Ksh15 billion .
“This relates to the cost of default on interest at one percent of the due amount,” say the disclosure documents seen by the Business Daily. SGR posted an operation loss of Ksh3.4 billion , and wired Ksh22.7 billion in loan repayments in the year to June.
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