Markets

Kenya to Issue $500 Million in Another Eurobond

Kenya has signed a memorandum of understanding (MoU) with Nippon Export and Investment Insurance (NEXI) to issue a Samurai Bond worth $500 million in two phases of $250 million each.

A Samurai Bond is a Japanese yen-denominated bond issued in Tokyo by a non-Japanese entity and subject to Japanese regulations.

The proceeds of the bond will be used to support e-mobility initiatives, such as promoting electric vehicles (EVs) and enhancing energy efficiency in Kenya’s transmission network. The bond will be utilized during the 2024/2025 financial year, which starts on July 1, 2024.

The issuance of the Samurai Bond signifys Kenya’s plan to diversify its funding sources and reduce its exposure to US dollar-denominated debt, as it faces the challenge of repaying its maturing Eurobonds.

Kenya has also secured funding from Japan for various green energy projects, such as the Meru Wind Farm, the Isiolo Solar Energy, and the Menengai Geothermal plan.

According to Treasury Principal Secretary Chris Kiptoo, who signed the MoU with NEXI CEO Atsuo Kuroda in Tokyo, the Samurai Bond will bolster the bilateral ties between Kenya and Japan for industrial development and green growth.

He also said the bond will attract more Japanese investors and companies to Kenya.

However, some market analysts have warned that the Samurai Bond could pose some risks for Kenya in the long term, if the Bank of Japan decides to hike its interest rates or cut its monetary easing program, which could strengthen the Japanese yen and increase the cost of servicing the debt.

 

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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