The government has borrowed Sh6.3 billion from South Korea to finance the proposed Bus Rapid Transport (BRT) network in Nairobi.
Business Daily reports that Treasury signed the Sh6,365,150,000 loans with the Korean Export and Import Bank on January 29th this year, but the funds are yet to be disbursed to the Kenyan government.
“The loan will attract an interest rate of Sh0.1 percent per annum and a service charge of Sh0.1 percent per annum on undisbursed loan amount,” Treasury said in disclosures to Parliament.
The exchange rate was agreed at Sh107.85. Kenyan taxpayers will service the long-term loan for 40 years to January 29th, 2061.
The funds will go into financing six BRT corridors in Nairobi, with the first being the one on Thika Road, running from Ruiru and terminating at Bomas of Kenya.
Others will run along Mombasa Road from the Jomo Kenyatta International Airport (JKIA) to James Gichuru Road, then Rironi, and also along Outering Road.
The government also intends to build other BRT corridors on Ngong Road and Jogoo Road.
The corridors are expected to hold roughly 1,000 high-capacity buses, thus reducing travel time and cost by up to 70 percent.
The government plans to offer a private company a 12-year concession to run BRT on Thika and Mombasa roads to ease traffic in the city.
The company will operate 300 BRT buses, according to Nairobi Metropolitan Area Transport Authority (Namata) acting director-general Francis Gitau.