Financial Crisis Looms As Kenya Defaults On Arror, Kimwarer And Itare Dams Loans

The government has defaulted the multibillion Arror, Kimwarer and Itare dams loan.

According to Auditor General Nancy Gathungu, Kenya could face a financial crisis after it failed to repay the loan owed to an international bank.

A report on NTV showed that Kenya was supposed to pay the first installment for the KSh 11 billion Arror Dam and KSh 8.63 billion for the Kimwarer Dam.

The two mega infrastructure projects were to be constructed in Elgeyo Marakwet county.

Former Treasury Cabinet Secretary, Henry Rotich was accused of misappropriation of public funds relating to the construction of the two multipurpose development dam projects.

Rotich and four others have also been charged jointly with a variety of offences ranging from conspiracy to defraud, abuse of office, and failure to comply with various sections of the law.

The ex-CS was accused of carrying out contracts that required the Kenyan government to pay approximately KSh 63 billion for the construction of the two dams.

On the other end, the construction of Itare dam which was valued at KSh 11.5 billion was halted over alleged malpractices.

The dam was expected to provide clean water to approximately 800,000 people in Nakuru county.

At the same time, the government delayed payments of over KSh 3.6 billion owed to a Chinese contractor that built the Nairobi’s Southern bypass and landowners displaced by the project.

Gathungu said Kenya fell back in remitting KSh 1.2 billion to China Road and Bridges Corporation (CRBC) for setting up the 28.6-kilometre road, which links Nairobi and Kiambu counties via Lang’ata and Kikuyu.

It has also delayed KSh 2.4 billion compensation to landowners displaced from the project corridor.

The government spent KSh 21.5 billion on the road having paid the Chinese contractor KSh 19.4 billion and landowners KSh 2.1 billion before falling back after the road was completed.