This archive report was first published on 6 August 2019.
Published on August 6, 2019, a report by Nation Media Group exposed how Kenya's strategic assets were used as collateral for Chinese loans.
The report highlighted the risks associated with the Standard Gauge Railway (SGR) loan, which has been facilitating the construction of the railway.
According to the report, the contract for the SGR loan includes a confidentiality clause that prevents Kenya from making the deal public without prior written permission from China.
The clause also states that Kenya is not entitled to any right of immunity from arbitration, suit, or execution with respect to its obligations under the agreement.
Furthermore, the report revealed that Kenya is compelled to import goods, technology, and services from China, and that any disputes related to the SGR loan will be resolved in Beijing through the China International Economic and Trade Arbitration Commission (Cietac).
The agreement also requires Kenya to sign a non-dispute clause, agreeing not to dispute the choice of Cietac as an arbitrator and to take its decision.
Additionally, the report stated that the commercial loan is insured by the China Export and Credit Insurance Corporation (SinoSure), and that all charges regarding the management of the loan are to be paid by Kenya.
Two escrow accounts were set up, with full control of the Chinese, especially at default or when railway revenues fail to meet the loan obligations.
