Kenya secures Sh40 billion loan from China for rural roads projects

China is set to construct more roads in Kenya after the government secured a Sh40 billion loan to fund the development of 15 rural roads across the country.

Treasury Cabinet Secretary John Mbadi on Friday signed the credit facility agreement in Beijing, China with Tan Jiong, President of the China Development Bank.

The project, according to Treasury, is set to transform rural infrastructure, a critical area for Kenya's development, with CS Mbadi hailing the agreement as a "game-changer" for the country's economy and rural development.

"Today's signing is important because the government prioritises rural road development. This project will unlock trade opportunities, improve market access, and enhance the quality of life for millions in underserved areas," Mbadi stated.

He emphasised that the new roads will contribute significantly to achieving Kenya's Vision 2030 goals.

The Treasury further noted that the roads will stimulate economic activities, create jobs, and improve access to essential services in rural areas, which will be essential in reducing poverty and enhancing livelihoods.

The signing ceremony was attended by several high-ranking Kenyan officials, including Transport Cabinet Secretary Davis Chirchir, Treasury Principal Secretary Chris Kiptoo, and engineer Joseph Mbugua, while China was represented by Tan Jiong.

President William Ruto, who has been advocating for rural infrastructure development, reaffirmed his administration's commitment to improving the lives of the 70 per cent of Kenyans living in rural areas.

"We are prioritising roads that directly affect the livelihoods of the majority of Kenyans," Ruto said earlier in the week.

The loan is expected to facilitate better access to markets for rural farmers, reduce transportation costs, and improve the overall connectivity between rural areas and urban centres.

This, in turn, is expected to spur economic growth and development in regions that have long suffered from poor infrastructure.

At the same time, PS Kiptoo also signed an MoU to strengthen cooperation through the Public-Private Partnership (PPP) model, aimed at increasing private sector involvement in Kenya's development projects.

Kiptoo finalised the agreement in the presence of Wang Shaodan, Chairman of the China Africa Development Fund.

"The MoU signed today is expected to encourage more Chinese companies to invest in Kenya's infrastructure projects using the PPP financing framework. This partnership will be crucial in supporting long-term investments in key sectors, advancing Kenya's development goals," the National Treasury stated in a statement.

The China Development Bank also announced plans to expand the China Africa Development Fund's presence by opening a new office in Nairobi.