China has promised to help Kenya deal with its debt challenges, the Chinese Embassy in Kenya has said.
In a statement on Monday, the Embassy said that it is holding “smooth” talks over the issues, even as a number of debts fall due.
“China attaches great importance to debt suspension and alleviation in African countries including Kenya,” the statement read in part.
The statement reveals that China has signed debt service suspension agreements with 12 African countries and provided waivers of a matured interest-free loan for 15 African countries under the G-20 debt service suspension initiative.
Kenya owes China Exim Bank $1.4 billion (Ksh140 billion) used to build the Nairobi-Naivasha Standard Gauge Railway (SGR) and the five-year holiday offered is set to expire on Thursday, January 21, 2021.
Kenya currently pays $1 million (Ksh100 million) every month to China’s Africa Star Railway Operation Company to run the Nairobi – Mombasa SGR, but the government has been negotiating to have the amount reduced to $600,000 (Ksh60 million).
Kenya’s debt obligation to China is set to increase to KSh84.3 billion this financial year, then later Ksh111.4 billion in the financial year 2021/2022.
Last week, Kenya secured a debt repayments relief deal with the Paris Club of international lenders and it is seeking further relief from non-Paris Club bilateral creditors, Reuters has reported.