US reveals Kenya’s secret Sh139bn coronavirus loan

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US reveals Kenya’s secret Sh139bn coronavirus loan


Treasury building. FILE PHOTO | NMG

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summary

  • Kenya signed a $ 139.5 billion secret loan agreement in June
  • The US Securities and Exchange Commission has announced the deal between the Treasury Department and the Canadian company Kallo Inc for the billion shilling deal to modernize Kenyan health infrastructure to contain Covid-19.
  • Under the agreement, Belarus-based Techno-Investment Module (TIM) provided funding for a project called Kallo Integrated Delivery System (KIDS), the details of which are still sparse and have not been disclosed in Kenya.

Publisher’s Note: The National Treasury issued a statement following the publication of this story denying the existence of the loan agreement between Kenya and the Canadian company Kallo Inc and the Belarusian company Techno-Investment Module (TIM).

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Kenya signed a $ 139.5 billion secret loan agreement in June

The US Securities and Exchange Commission has announced the deal between the Treasury Department and the Canadian company Kallo Inc for the billion shilling deal to modernize Kenyan health infrastructure to contain Covid-19.

The deal was signed last June after rising coronavirus cases, forcing the government to impose restrictions, including a daily curfew, closing schools and pubs, and restricting movement to and from four counties, including Nairobi.

Under the agreement, Belarus-based Techno-Investment Module (TIM) provided funding for a project called Kallo Integrated Delivery System (KIDS), the details of which are still sparse and have not been disclosed in Kenya.

Yesterday, the Treasury Department said it needed more time to look at that Business day Questions including whether Parliament was informed of the debt settlement and whether Kenya received the loan.

Kallo Inc says on its website that KIDS provides a comprehensive healthcare infrastructure using both mobile clinics and inpatient hospitals supported by a global telemedicine system.

“On June 26, 2020, the company entered into contracts with the Republic of Kenya and Techno-Investment Module Limited for a project contract and a financing agreement,” read the SEC filings dated March 3.

“Under the terms of the agreement, Kenya is seeking to borrow EUR 1,068,932,543 from TIM and the funds will primarily be used to build the first phase of a planned national health infrastructure in the Republic of Kenya, which will be operated by Kallo Inc.”

The loan is a 20 year facility with a two percent plus Libor. is calculated [London Interbank Offered Rate], which is currently at minus 0.4 percent, show the submissions.

Kenya was given a three-year grace period to freeze part of the loan, the payments of which, including principal and interest, were to be made quarterly from 2023.

Techno-Investment Module Ltd was expected to pay the Sh139.5 billion loan directly to Kallo Inc. once Kenya issues a guarantee, technically known as a standby letter of credit.

A Standby Letter of Credit (SLOC) is a legal document that guarantees a bank’s payment obligation to a supplier in the event that the buyer fails to comply with the agreement.

It helps to facilitate international trade between companies that do not know each other and have different laws and regulations.

The agreement puts Kenya on trial and compensation should it refuse the loan, reflecting the controversy over billions of shillings paid out to an Anglo-leasing fraud-related company that has $ 70 billion in government contracts on shutters nonexistent firms were awarded.

In 2014, the Ministry of Finance settled the long-standing legal dispute with one of the 13 Anglo leasing companies through negotiations and thus cleared the biggest hurdle that had delayed the plans to issue the first Eurobond.

SEC filings show Canadian firm Kallo Inc is expected to make payments to a company called Magnitudo for supplies related to Covid-19.

Letter

Editor’s note: A screenshot of the National Treasury statement denying the existence of the loan agreement between the Kenyan and Canadian companies Kallo Inc and the Belarusian company Techno-Investment Module (TIM).

the Business day could not get any information about the Magnitudo company during an internet search.

“Upon receipt of an invoice from Magnitudo for B-SAFE National COVID-19 Lockdown Management, B-TEST National COVID-19 Screening, local production of face masks and the delivery of essential PPE, Kallo will transfer the amount due as per the financial proposal. Kallo Inc testifies on Form 8-K – a report that companies must file with the SEC to announce important events that affect shareholders.

Companies must file filings with the powerful SEC if their securities are publicly traded in America, funds are raised in the United States, or shareholders are required to file corporate actions with Washington regulators.

The Canadian firm expects to receive Sh21 billion from the treasury deal despite warnings from the company that it has never carried out projects similar to Kenya.

It does not appear from the file how the remaining 118 billion Shillings. should be split out of the loan.

“In accordance with the financing agreement, Kallo Inc may receive up to four payments of 40,261,253 euros in exchange for the goods and services that the company is expected to provide under the project contract,” the report said.

“While we believe our KIDS system will provide significant value in integrating a nationwide healthcare system in counties that lack such a system, we have no experience installing, operating, or maintaining the KIDS system or any System in any country. Therefore, we cannot assure you that we will not be able to achieve financial success in conducting the business required to install, operate or maintain the KIDS system in the Republic of Kenya or anywhere else. “

The loan agreement was signed at a time when Kenya had received dire predictions about the expected Covid-19 cases and deaths, which were expected to overwhelm the country’s rickety health infrastructure.


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