NAIROBI: Kenya will sign a $350 million loan with six commercial banks on Wednesday to help finance a refined products pipeline between Mombasa and Nairobi, the Kenya Pipeline Company (KPC) has told local newspapers.
The state-run company awarded construction of the 450-km pipeline to Lebanon’s Zakhem International which started work in July 2014.
The pipeline is separate from an oil pipeline that will take crude from newly discovered Kenyan and Ugandan oilfields to the coast. The route for the oil pipeline is under review.
“The $350 million loan will partly finance the construction of an ultramodern refined products pipeline from Mombasa to Nairobi,” Flora Okoth, KPC’s acting managing director, said in a statement published in the Daily Nation and other newspapers.
KPC has said the existing pipeline linking the two cities, built by Zakhem International in 1973, has outlived its 30-year lifespan and was prone to ruptures.
The company said last year that the project would be financed through internally generated company funds and external borrowing would be limited to $400 million to $500 million.
Many of Kenya’s refined fuel imports, as well as those in transit to neighbouring countries, have to be transported by truck, a slow and unreliable method that clogs roads.
The banks involved are CFC Stanbic Bank, Citibank Kenya , Commercial Bank of Africa, Co-operative Bank, Rand Merchant Bank and Standard Chartered Bank, the newspapers reported.
