By Enyichukwu Enemanna
Kenya has attracted funding, amounting up to 25 billion yen ($169.42 million) from Japan, aiming the boost vehicle assembly and parts manufacturing, the East African country’s top official announced on Thursday.
“This facility will strengthen our local vehicle assembly and parts manufacturing industry while also addressing electricity transmission and distribution losses, currently standing at about 23% of our national output,” Kenyan Foreign Affairs Minister, Musalia Mudavadi said in a post on X.
The agreement was signed by Mudavadi and the CEO, Nippon Export & Investment Insurance, Atsuo Kuroda during the ongoing Ninth Tokyo International Conference on African Development (TICAD 9), attended by Japanese Prime Minister Shigeru Ishiba and Kenyan President William Ruto.
This came after the signing of a term sheet on Wednesday for a yen-denominated loan to Kenya backed by NEXI.
Japan’s foreign ministry confirmed the loan will be NEXI-guaranteed, a structure designed to lower sovereign funding costs, but specific terms were not disclosed.
Kenya, the largest economy in the East African region is among countries hit by US President Donald Trump’s tariff regime and aid cuts.
Under President Ruto, it has been making efforts to diversify income generation sources after an attempt to increase tax last year was met with deadly protests in which dozens of persons were feared dead in the confrontation between the security forces and demonstrators.
Speaking on the sidelines at TICAD on Thursday, Kenya’s Director-General of debt management in the ministry of finance, Raphael Otieno said Nairobi’s debt strategy is shifting focus from short-term refinancing risks to addressing high borrowing costs.
“The cost of our debt is very, very high,” he said during a panel discussion, noting that Kenya is exploring sustainability-linked bonds with guarantees, yen-denominated “Samurai” bonds, renminbi-denominated “Panda” bonds, and debt swaps to reduce expensive obligations.
