Kenya’s loan repayments to China for the current financial year will jump from KSh31 billion to KSh71.4 billion as Kenya starts repaying the SGR loan.
Taxpayers will shoulder part of the 130% increase due to revenue shortfalls from the project, Business Daily says.
Inflows from passenger and freight services average a monthly sales of KSh841 million, which is only 56% of the operational costs. Yattani, however, believes that the project will break even by next year, easing the pressure on the Railway Development Levy and budget supplements.
Treasury confirms that it has commenced the payment process, transferring KSh10 billion to Exim bank.
We have commenced the process of payment and the money will hit their bank account by the first week of January. This money has been captured in our Budget.Acting Treasury CS, Ukur Yattani
The repayments commence after the end of the 5-year grace period, as per the agreements made with Exim bank in May 2014. Kenya has 15 years to repay the SGR loan.
Repayments in the next financial year will increase to KSh84.3 billion, then later KSh111.4 billion in the financial year 2021/2022.