The Lake Victoria Development Authority (LBDA) mall in Kisumu City is struggling to resettle a Kes 2.5 billion loan borrowed from Cooperative Bank to finance its construction.

Appearing before the National Assembly Departmental Committee on Regional Development, LBDA Managing Director (MD) CPA Wycliffe Ochiaga revealed that the loan has since accrued interest and penalties with the total amount demanded by the bank reaching Kes 4.5 billion.

Ochiaga said construction of the mall started on 7th August 2013 and was completed and handed over to LBDA on 19th April 2016.

Further, he said that the mall’s occupation currently stands at 30%, hampering efforts to service the loan facility, which was disbursed between 2013 and 2015.

“The loan facility for the project remains unpaid after the handover and has continued to accrue interests and penalties. However, LBDA has negotiated with the bank to halt accruing of interests and penalties on the project.”

Further, he cited accessibility as the biggest challenge keeping off tenants, saying a section of the Kisumu-Kakamega Road leading to the mall's main entrance has taken too long to complete.

Currently, the mall, expected to generate more than Kes 100 million in revenue annually and create employment opportunities for the locals, is struggling to find an anchor tenant.

So far, only a few government departments and parastatals, including the Kenya Revenue Authority (KRA) and Communication Authority of Kenya (CAK), have moved into and occupied 30% of the space currently in use.

The parliamentary committee led by Vice Chair Mary Wamaua visited the facility to ascertain the status as part of oversight for regional development projects.

Wamaua challenged the LBDA management to enhance marketing for the property to boost occupancy and generate more revenue.

She said the drive must attract key government outlets like the Huduma Center so that more people can visit the facility and access other services offered within the expansive mall.