INVESTMENT INCENTIVE AGREEMENT
BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
AND
THE GOVERNMENT OF THE REPUBLIC OF KENYA

THE GOVERNMENT OF THE UNITED STATES OF AMERICA and THE
GOVERNMENT OF THE REPUBLIC OF KENYA;

AFFIRMING their common desire to encourage economic activities in the
Republic of Kenya that promote the development of the economic resources and
productive capacities of the Republic of Kenya; and

RECOGNIZING that this objective can be promoted through investment support
provided by the Overseas Private Investment Corporation (“OPIC"), a development
institution and an agency of the United States of America, in the form of investment
insurance and reinsurance, debt and equity investments and investment guaranties;

HAVE AGREED as follows:

ARTICLE 1

As used in this Agreement, the following terms have the meanings herein
provided. The term "Investment Support" refers to any debt or equity investment, any
investment guaranty and any investment insurance or reinsurance which is provided by
the Issuer in connection with a project in the territory of the Republic of Kenya. The
term "Issuer" refers to OPIC and any successor agency of the United States of America,
and any agent of either. The term "Taxes" means all present and future taxes, levies,
imposts, stamps, duties and charges imposed in the Republic of Kenya and all
liabilities with respect thereto.

ARTICLE 2

(a) The Issuer shall not be subject to regulation under the laws of the
Republic of Kenya applicable to insurance or financial organizations.

(b) The Issuer, all operations and activities undertaken by the Issuer in
connection with any Investment Support, and all payments, whether of interest,
principal, fees, dividends, premiums or the proceeds from the liquidation of assets or of
any other nature, that are made, received or guaranteed by the Issuer in connection with
any Investment Support shall be exempt from Taxes whether imposed directly on the
Issuer or payable in the first instance by others. Neither projects receiving Investment
Support nor investors in such projects shail be exempted from Taxes by operation of
this Article, provided, however, that any Investment Support shall be accorded tax
treatment no less favorable than that accorded to the investment support of any other
national or multilateral development institution which operates in the Republic of
Kenya. The Issuer shall not be subject to any Taxes in connection with any transfer,
succession or other acquisition which occurs pursuant to paragraph (c) of this Article or
Article 3(a) hereof, but obligations for Taxes previously accrued and unpaid with
Tespect to interests received by the Issuer shall rot be extinguished as a result of such
transfer, succession or other acquisition.



(c) If the Issuer makes a payment to any person or entity, or exercises its rights as a
creditor or subrogee, in connection with any Investment Support, the Government of
the Republic of Kenya shall recognize the transfer to, or acquisition by, the Issuer of
any cash, accounts, credits, instruments or other assets in connection with such
payment or the exercise of such rights, as well as the succession of the Issuer to any
tight, title, claim, privilege or cause of action existing, or which may arise, in
connection therewith.

(d) With respect to any interests transferred to the Issuer or any interests to
which the Issuer succeeds under this Article, the Issuer shall assert no greater rights
than those of the person or entity from whom such interests were received, provided
that nothing in this Agreement shall limit the right of the Government of the United
States of America to assert a claim under international law in its sovereign capacity, as
distinct from any rights it may have as the Issuer pursuant to paragraph (c) of this
Article.

ARTICLE 3

(a) Amounts in the currency of the Republic of Kenya, including cash,
accounts, credits, instruments or otherwise, acquired by the Issuer upon making a
payment, or upon the exercise of its rights as a creditor, in connection with any
Investment Support provided by the Issuer for a project in the Republic of Kenya, shall
be accorded treatment in the territory of the Republic of Kenya no less favorable as to
use and conversion than the treatment to which such funds would have been entitled in
the hands of the person or entity from which the Issuer acquired such amounts.

(b) Such currency and credits may be transferred by the Issuer to any
person or entity and upon such transfer shall be freely available for use by such person
or entity in the territory of the Republic of Kenya in accordance with its laws.

ARTICLE 4

(a) Any dispute between the Government of the Republic of Kenya and the
Government of the United States of America regarding the interpretation of this
Agreement or which, in the opinion of either party hereto, presents a question of
international law arising out of any project or activity for which Investment Support
has been provided shall be resolved, insofar as possible, through negotiations between
the two Govemments. If, six months following a request for negotiations hereunder,
the two Governments have not resolved the dispute, the dispute, including the question
of whether such dispute presents a question of international law, shall be submitted, at
the initiative of either Government. to an arbitral tribunal for resolution in accordance
with paragraph (b) of this Article.

(b) The arbitral tribunal referred to in paragraph (a) of this Article shall be
established and shall function as follows:

(i) Each Government shall appoint one arbitrator. These two
arbitrators shall by agreement designate a president of the tribunal who shall be
a citizen of a third state and whose appointment shall be subject to acceptance
by the two Governments. The arbitrators shall be appointed within three
months, and the president within six months, of the date of receipt of either
Government's request for arbitration. If the appointments are not made within
the foregoing time limits, either Government may, in the absence of any other
agreement, request the Secretary-General of the International Centre for the
Settlement of Investment Disputes to make the necessary appointment or
appointments. Both Governments hereby agree to accept such appointment or



(ii) Decisions of the arbitral tribunal shall be made by majority vote
and shall be based on the applicable principles and rules of international law.
Its decision shall be final and binding.

(iii) During the proceedings, each Government shall bear the expense
of its arbitrator and of its representation in the proceedings before the tribunal,
whereas the expenses of the president and other costs of the arbitration shall be
paid in equal parts by the two Governments. In its award, the arbitral tribunal
may reallocate expenses and costs between the two Governments.

(iv) In all other matters, the arbitral tribunal shall regulate its own
procedures.

ARTICLE 5

(a) This Agreement shall enter into force on the date on which the
Government of the Republic of Kenya notifies the Government of the United States of
America that all legal requirements for entry into force of this Agreement have been
fulfilled.

(b) This Agreement shall continue in force until six months from the date of
a receipt of a note by which one Government informs the other of an intent to terminate
this Agreement. In such event, the provisions of this Agreement shall, with respect to
Investment Support provided while this Agreement was in force, remain in force so long
as such Investment Support remains outstanding, but in no case longer than twenty years
after the termination of this Agreement.

(c) Upon entry into force, this Agreement shall supersede the agreement
on investment guaranties between the Government of the United States of America
and the Government of the Republic of Kenya effected by exchange of notes signed
at Nairobi on April 20, 1964. Any matter concerning the Republic of Kenya relating
to support by OPIC of investments in the territory of the Republic of Kenya prior to
the entry into force of this Agreement shall be resolved under the terms of this
Agreement.

JN WITNESS WHEREOF, the undersigned, duly authorized by their respective
Governments, have signed this Agreement.

DONE at Nairobi, Republic of Kenya, on the 3 day of December, 1998, in

duplicate.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA THE REPUBLIC OF KENYA

KL EE —_—

Mr. Kirk Robertson His Excellency Joseph Kamotho
Executive Vice President (OPIC) Minister of Trade