President William Ruto on Tuesday met with Chinese counterpart Xi Jinping, with a wish list that could append Nairobi’s score on infrastructure.
President Ruto, in Beijing for the 9th Forum on China-Africa Cooperation (FOCAC), is retrying what he failed last year when he attended the Belt and Road Forum.
On Tuesday, Kenya joined the Asian Infrastructure Investment Bank (AIIB), seeing it a route to get funding related to infrastructure.
The Bank could usher Kenya into the new territory of Panda bonds which the Bank guarantees alongside the African Development Bank. Panda bonds are Chinese yuan-denominated fixed-investments issued by non-Chinese entities in the form of loans and sold in China.
The bilateral meeting with Xi was a scheduled routine event at the Great Hall of the People. But Nairobi wants money, for projects and has returned to Beijing after a soul-searching globally.
“Kenya firmly pursues the one-China policy and is ready to strengthen multilateral cooperation with China and render firm support to each other,” Ruto said.
One-China policy is Nairobi’s age-old stance, where it sees the People’s Republic of China as the true representation of the Chinese nation, as opposed to the Republic of China (Taiwan).
Kenya had been among the earliest African countries to back Beijing, voting on the floor of the UN General Assembly in 1971 to grant the UN Security Council permanent seat to the People’s Republic of China, replacing Taiwan.
Ahead of the trip, Kenya had indicated it would ask for the joint decision on completion of Standard Gauge Railway (SGR) 2B and 2C which is to extend to Malaba. Uganda has already said it will start construction of its bit from Malaba to Kampala from October although details of financing are still scanty.
Technical teams between China and Kenya have yet to commence discussions and come up with recommendations on steps for the establishment of Kenya Railway Institute and manufacturing of rolling stocks as well as technical support for Standard Gauge Railway (SGR).
In May this year, Kenya Kwanza administration announced its intention to seeks additional over $5.3 billion (about Ksh.720 billion at the time)to connect the SGR line from Naivasha to the Kenya-Uganda border town of Malaba.
In 2019, after the launch of the Madaraka Express in 2017, retired Uhuru Kenyatta failed to secure $3.68 billion to fund the railroad’s extension to Malaba.
China wanted the by-in of Uganda’s a key player to connecting South Sudan and Rwanda to Kenya’s Indian Ocean port city of Mombasa, arguing that with Uganda on board the SGR’s viability would not be feasible.
As a result Mr Kenyatta only managed to secured $400 million then to upgrade Kenya’s colonial-era metre-gauge-railway to Malaba.
Last year, Ruto also failed to secure funding. His meeting at the time came just months after he won an election in which he had lampooned the Chinese for loading debt on Kenya. The shoe may now be in a different foot.
Kenya also wanted to close the deal on the financing agreements for 15 rural roads using the RMB2 billion ($280,741,156 ) from China Development Bank. The Bank has already undertaken to complete the internal processes by end of FOCAC on September 6.
Also, on the table was the conclusion of concessional financing agreements with China Exim Bank for ITS, TVET III and Bosto Dam, which insiders within government indicated may not be concluded before FOCAC.
The government is also looking forward to engage China to commit to the development of Africa data centre.
At a time, the country is grappling with public debt, with china being one of the country’s owed, the Kenyan delegation is expected to discuss the concessional loans and grants financing facilities to safeguard debt sustainability and also align to projects with long gestation periods and social in nature like environmental conservation, health care, food security among others.
“We also plan to deliberate on the export credit insurance coverage from Sinosure because there is need to enhance / expand China risk exposure to Kenya’s public and private sector to promote trade and investment. The larger Sinosure exposure the more access of loan facilities to Kenya,” disclosed a top Kenyan official in the delegation.
Kenya will also be seek to explore the option of Public Private Partnership (PPP) programmes opportunities available in Kenya particularly those in the Belt Road Initiatives such as Jomo Kenyatta International Airport( JKIA)/ Wilson airport terminals, highways - Nairobi/Nakuru /Mau Summit/Eldoret/Malaba, LAPSET and Lamu Port.
The President hopes to conclude the outstanding requests at the earliest for among others the Northern By-pass; Muthaiga-Kiambu Dualling; Hola-Garissa Power transmission lines.
This will not be achieved, without the commitment of the issue of pending Bills, and therefore, Nairobi will be lobbying for the opening of Chinese banks operational branches in Nairobi to cover Kenya and Eastern Africa (Exim Bank, China Development and Bank of China).
Other areas, include sustained political cooperation and implementation of Joint Vision for Building a Closer Community with a Shared Future as well as close collaboration with Hunan on FOCAC activities and programmes.
“Kenya hopes to take the FOCAC Summit as an opportunity to push for further development of the comprehensive strategic cooperative partnership between Kenya and China. China is welcome to continue to increase investment in Kenya and expand bilateral practical cooperation in various fields, especially cooperation in connectivity, new energy, youth and other areas,” President Ruto stated.
