Kenya has defaulted a loan that was given by an Italian bank for the construction of Aror and Kimwarer dams.
According to a report by the Business Daily, Kenya has defaulted Kshs19.6 billion after failing to pay the first installments of the loan to the Italian Bank Intesa San Paolo.
Treasury documents that were brought before the parliament show that the first installment of Kshs11 billion that was borrowed for the Aror dam was to be paid in May 18 while Kshs8.6 billion for the Kimwarer was to be paid on May 9.
The bank said that the payments were not made amid of the ongoing investigations into the billions of shillings that were shared in foreign banks and never wired to Kenya government accounts.
“No payments have been made in 2021,” a bank representative who sought anonymity told the Business Daily.
Treasury record before the parliament however state that the government is yet to make the payments.
“Loan of Eur 258,688,881.72 (Sh33bilion) repayable in semiannual instalments commencing 9th May 2021 and ending on 9th November, 2035,” said the Treasury disclosures in reference to the Kimwarer dam debt.
On the Arror dam debt, the Treasury documents said: “Loan of Eur 319,620,697.07 (Sh40.8 billion) repayable in semiannual instalments commencing 18th May 2021 and ending on 18th November, 2035.”
It is however unclear why the government failed to make the payments since the Treasury did not respond to requests for comments.
The Kimwarer Dam project was cancelled by President Uhuru Kenyatta in September 2019 after it was established that it was technically and financially unfeasible.
The president also ordered for commencement of the Arror dam project at half the costs as the technical committee he appointed to look into the developments found it economically viable.
The dams scandal led to the sacking of Henry Rotich as the Cabinet Secretary of the National Treasury.
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