Kenya borrowed 1.06 billion Euros (Ksh139.5 billion) in June 2020 secretly from Belarusian and Canadian companies, meant for the construction of mobile clinics.
The loan deal between Kenya and Canadian firm Kallo Inc was revealed by the US Securities Exchange Commission (SEC).
The deal which was never made public in Kenya entailed Belarus-based Techno-Investment Module (TIM) which provided financing for project labelled the Kallo Integrated Delivery System (KIDS).
“On June 26, 2020, the company finalised contracts with the Republic of Kenya and Techno-Investment Module Limited for a project contract and a finance contract. Under the terms of the agreement, Kenya is seeking to borrow the sum of 1,068,932,543 euros from TIM and the funds are to be used primarily to build phase one of a planned National Healthcare Infrastructure in the Republic of Kenya to be undertaken by Kallo Inc,” said SEC on March 3.
The loan will be charged at two percent plus Libor (London Interbank Offered Rate), for a period of 20 years, with a three-year grace period.
The payments, including principal and interest, will be done quarterly from 2023.
Kallo Inc will receive Ksh21 billion from the Treasury for the project, while details are scanty on how the remaining Ksh118 billion will be spend.
“In accordance with the Finance Contract, Kallo Inc may receive up to four payments of 40,261,253 Euros in consideration for the goods and services that the Company is to provide under the Project Contract,” the company said.
“While we believe that our KIDS system offers significant value in integrating a nationwide healthcare system in counties lacking such a system, we have no prior experience in installing, operating, or maintaining the KIDS system or any such a system in any country. As a result, we cannot assure you that we are able to achieve any financial success in conducting the business required in installing, operating or maintaining the KIDS system whether in the Republic of Kenya or elsewhere.”