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HomeAfricaConsortium of banks bails out Kenya Oil Pipeline company

Consortium of banks bails out Kenya Oil Pipeline company

A consortium of five banks — CFC Stanbik Bank, Barclays Bank of Kenya, Commercial Bank of Africa, Citibank, and Kenya Commercial Bank – – is providing a loan of 8.2 billion Kenyan shillings to Kenya Oil Pipeline compa n y (KPC) to enable it expand its services.

The company which says the expansion project will cost 14 billion shillings, is expected to expand its pipeline to cater for increase demand for oil products in

the west of the country and serve neighbouring countries Uganda, Southern Sudan a nd Rwanda.

If it gets the 8.2 billion shillings from the banks, the company is expected to generate the balance of 5.8 billion shillings from internal resources.

A Director of the CFC Stanbik Bank, John Ngumi, said the move to come together a s a consortium of local banks served to show that the country had sufficient res o urces to continue financing infrastructure needs in the face of the current glob a l financial crisis.

Head of Finance and Strategy at KPC, Seleste Kilinda, said when an agreement for the loan was signed that the company acted to cushion itself from fluctuations i n the dollar rates or even when prices of components to be used in the construct i on fluctuate on the global market.

The project is expected to increase the initial oil flow rate by 440 cubic metre s per hour up from the current 220 cubic metres per hour.

KPC needs the money to upgrade its oil pipeline from Nairobi to Eldoret in the R ift Valley province.

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