China's Infrastructure Bank Takes Kenya Under its Wings

Kenya’s application to the China-led Asian Infrastructure Investment Bank (AIIB) has been accepted, making it the financial solution to Nairobi’s growing infrastructure needs. AIIB’s Vice President and Corporate Secretary Sir Danny Alexander commented in a statement, "We're very happy to welcome Papua New Guinea and Kenya as prospective members of AIIB,"  with the addition of these two countries the bank has now 86 members in its union. 

This comes at a time when Kenya was on a look out for cheaper financing options, especially after its upgrade to a lower middle-income economy in 2014, ending their special concession terms via the World Bank’s International Development Association. The Cabinet Secretary for the National Treasury, Mr. Henry Rotech has yet to disclose Kenya’s AIIB shareholding and investment details.  As per AIIB, Kenya will officially join the union once all the local formalities are completed including the first installment of capital that will be paid to the bank.
Multilateral development banking was first proposed by Chinese President Xi Jinping in 2013.It started functioning as a business in 2016 in Asia, funding construction of roads, railway lines, ports and energy as well as rural infrastructure. 
The financial assistance received via AIIB, will mainly be used to develop the transport, energy and agriculture sectors in Kenya. Mr. Rotech stated, "There is need to expand our funding and all these options are welcome to Kenya". So far China remains Kenya's largest bilateral lender. As recorded in December 2017, it has given Kenya an amount of Sh520 billion supporting developmental projects.

Posted on : 05 May,2018

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