“Kenya Railways Denies Default on Sh167.5bn SGR Loan, Clarifies Loan Details”

Kenya Railways has formally responded to a report published on November 12, 2024, by one of the major dailies, which carried the headline “Kenya Railways Defaults on Sh167.5bn SGR Loans.” The article in question claimed that the corporation had failed to meet its repayment obligations for a loan of Sh167.5 billion, which was sourced from China’s Exim Bank, facilitated through the National Treasury. In its response, Kenya Railways has categorically denied the allegations of default, providing a detailed explanation and clarification on the matter.

The corporation stated that the loan referenced in the article is an On-lent loan, provided by the National Treasury (TNT), rather than a direct loan from China Exim Bank, as the article implied. Kenya Railways stressed that the TNT loan and the China Exim Bank loan are two distinct financing agreements, each governed by separate terms and conditions. As such, Kenya Railways is only accountable for the obligations tied to the On-lent loan with TNT and is not responsible for any terms or repayments related to the China Exim Bank loan.

Kenya Railways also emphasized that there has been no default on any SGR-related loan repayments, and that the report in question contained misleading information. The corporation’s statement further clarified that the loan with China Exim Bank and the On-lent loan with TNT are entirely separate, with different financing arrangements and conditions. According to Kenya Railways, the corporation is only privy to the terms and agreements of the On-lent loan facilitated by TNT and has been in full compliance with its repayment obligations.

To further address the concerns raised in the media report, Kenya Railways pointed to its recent strong performance in freight transportation, surpassing a significant milestone of 6 million tonnes in the past two years. This positive achievement underscores the corporation’s financial health and its ability to meet its operational and financial obligations.

In light of these clarifications, Kenya Railways urged the public to disregard the misleading report and assured stakeholders that the corporation is in good standing regarding its financial commitments. The corporation reiterated its commitment to transparency and responsible financial management, emphasizing that it remains focused on its mandate to deliver efficient, reliable, and sustainable rail services across Kenya.

Kenya Railways’ statement serves as a reassurance to its stakeholders, including investors, partners, and the Kenyan public, that the corporation continues to maintain a solid financial footing and has not defaulted on any loan repayments related to the Standard Gauge Railway (SGR).