Chinese Rail Operator to Kenya Railways: Settle Your Debts First and Then We’ll Hand Over Control of the SGR

File image of Kenya's Standard Gauge Railway that China financed and built as part of the Belt and Road Initiative. Simon Mania/AFP

Afristar, a subsidiary of the state-run China Road and Bridge Corporation, informed Kenya Railways that if it wants the May 2022 handover of the Mombasa to Nairobi Standard Gauge Railway to be completed on time, it’ll first have to pay off its debts, according to a report Monday in Business Daily.

The key debt in question is a $380 million payment that Kenya Railways (KR) failed to make last year and apparently did not reschedule with Afristar. Contrary to widespread concerns that Chinese creditors, namely the China Exim Bank, would exercise punitive clauses in the SGR contracts to garnish revenues from the Port of Mombasa in the event of a default, neither Afristar nor China Exim Bank exercised that option.

  • Get a daily email packed with the latest China-Africa news and analysis.
  • Read exclusive insights on the key trends shaping China-Africa relations.
  • Full access to the News Feed that provides daily updates on Chinese engagement in Africa and throughout the Global South.

China, Africa and the Global South... find out what’s happening.

Subscribe today for unlimited access.

OR

Already a subscriber? Log in Click Here to Learn More
by Eric Olander

Most Read

1
Developing Countries’ Debt Servicing Costs to China Are Significant, but Nowhere Near as Much as Other Creditors
2 Chinese Military Fans Discuss Why Indonesia Bought Rafale Instead of J-10C
3
Chinese Cargo Planes Secretly Ferrying Supplies to Iran, Claim Online Sleuths
4 Trump’s Contradictory Iran Strategy Leaves U.S. Weaker After War’s End, Says Chinese Commentator
5
Indonesia Goes Nuclear, Taps China and Russia for Modular Reactors
6
Indonesia Begins $5.9 Billion Chinese EV Battery Project Despite Environment Fears

You Might Like

With a $1 Billion Payment Due, Kenyan MPs Call on Government to Renegotiate SGR Loan Deal with China

Kenya’s National Treasury is calling on the parliament to provide it with $940 million dollars for the latest instalment to repay China for the controversial Standard Gauge Railway (SGR). The Treasury’s request prompted ...

Is Default the Next Step for Kenya’s Embattled Standard Gauge Railway?

The Chinese-financed and built Standard Gauge Railway is losing money at an unsustainable rate of $9.2 million per month prompting renewed calls in parliament for the State House to renegotiate the 

China, Debt and the Future of Kenya

The investigative series Africa Uncensored broadcast a riveting one-hour documentary on Kenyan national TV last night that explored the country’s ballooning national debt. The program highlighted how, as Kenya’s largest bilateral creditor owning ...

How Much Does Kenya Owe China to Build and Operate the Various SGR Lines?

It’s not clear at this time if the decision to expedite the handover of some SGR responsibilities from Afristar to Kenya Railways is part of the ongoing debt restructuring talks that are purportedly ...

What is The China-Global South Project?

Independent

The China-Global South Project is passionately independent, non-partisan and does not advocate for any country, company or culture.

News

A carefully curated selection of the day’s most important China-Global South stories. Updated 24 hours a day by human editors. No bots, no algorithms.

Analysis

Diverse, often unconventional insights from scholars, analysts, journalists and a variety of stakeholders in the China-Global South discourse.

Networking

A unique professional network of China-Africa scholars, analysts, journalists and other practioners from around the world.

More about CGSP