Kenya Plans $12.4 Billion External Loans by June 2022, IMF Says

(Bloomberg) -- Kenya plans to borrow $12.4 billion between now and June 2022 from foreign sources, the International Monetary Fund said in a report detailing terms and conditions of a separate $2.34 billion financing package approved by its board last week.

The amount includes $7.3 billion in Eurobonds, $4.8 billion in concessionary borrowing and $282 million semi-concessional loans, the IMF said in a report on its website. About $2.3 billion of the Eurobonds will be new borrowing to be spent on infrastructure projects, while $5 billion is refinancing for a Eurobond maturing in 2024 and to retire pricey syndicated loans, it said.

The external borrowing during the next 14 months amounts to about 6% to 7% of gross domestic product, according to Yvonne Mhango, head of research for sub-Saharan Africa at Renaissance Capital.

“It’s a significant amount for a country with debt that is already close to 70% of GDP, and one that is at high risk of debt distress,” she said. “The increase in domestic yields may be a factor that compelled the authorities to seek some external financing. However, we expected an increase in concessional financing to help keep financing costs moderate.”

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