The Treasury borrowed Sh223.5 billion in the four months to January from 11 new loans contracted from multilateral and commercial creditors between last September and the end of January 2024.
From this, Sh30 billion was used for the preparations to refinance the maturing Eurobond.
The details of the new borrowings show that 10 of the loans are from multilateral lenders and one from a commercial lender.
“The total value of the 11 new loans signed is equivalent to Sh223,541,581,121. Two of the loans had been disbursed by the time of submitting this report,” Treasury Cabinet secretary Njuguna Ndung’u said in disclosures to the National Assembly.
The Treasury report shows that Kenya took a syndicated term loan facility worth Sh30.63 billion ($210 million) on December 28, 2023, from the Eastern and Southern African Trade and Development Bank that will be repaid in US dollars.
“The purpose of the loan is to fund the development projects, refinancing or repurchase of Eurobonds issued by the borrower, and payment of any fees, costs and expenses in connection with the finance documents,” says Prof Ndung’u.
“Tranche 1 loans and the Tranche 1 incremental facility loans will be repaid in four equal semi-annual instalments of $2,500,000 on each applicable repayment date, Tranche 2 loans and the Tranche 2 incremental facility loans will be repaid in eight equal semi-annual instalments of $12,500,000 on each applicable repayment date, and Tranche 3 loans and the Tranche 3 incremental facility loans will be repaid in 12 equal semi-annual instalments of $8,333,333 on each applicable repayment date.”
Kenya last week moved to avert a default of the $2 billion Eurobond maturing in June after it settled on a higher rate on its return to the global debt market to finance an early buyback. The country raised $1.5 billion through a Eurobond issued expensively to global investors to help buy back its $2 billion Eurobond issued in 2014.
President William Ruto announced that Kenya had paid $1.5 billion from the proceeds of the Eurobond priced at 10.37 percent.
The Treasury documents also show that the Treasury signed a Sh36,99 billion (euros 235,700,000) with the International Development Association on December 19, 2023, towards the second programme for strengthening governance and public investments.
“The purpose of the loan is to enhance revenue mobilisation and deepen accountability and transparency of public finance management at the national government level,” said Prof Ndung’u.
The loan will be repaid in 40 equal semi-annual repayments of euros 3,889,050 from March 1, 2029 through to September 15, 2048, and 10 equal semi-annual instalments of euros 8,013,800 from March 15, 2049, through to September 15, 2053.
The loan attracts an interest rate of 1.25 percent per annum plus the basis adjustment and the service charge of 0.75 percent per annum plus the basis adjustment on the withdrawn credit balance.
The commitment charge rate is 0.5 percent per annum on the unwithdrawn financing balance.
Kenya also borrowed Sh28.58 billion (euros 182,100,000) from the IDA to improve the financial viability of Kenya Power and Lighting Company (KPLC) and increase access to electricity.
The loan, signed on December 15, 2023, will be repaid in 40 equal semi-annual repayments of euros 3,004,650 from October 1, 2028 to April 15, 2048 and 10 equal semi-annual instalments of euros 6,191,400 from October 15, 2048 to April 15, 2053.
The Treasury and the OPEC Fund for International Development signed a Sh5.8 billion ($40 million) for the development of urban roads in five counties.
The IDA extended a Sh14.29 billion loan to Kenya to increase employment, earnings, and promote savings for targeted youth, at a national scale.
The Treasury also signed a Sh4.38 billion with the IDA to increase access to irrigation water for project beneficiaries and enhance the institutional framework.
The IDA further extended a Sh21.44 billion from the IDA to improve urban infrastructure, private sector engagement in urban planning, and the transition of refugee camps into integrated host communities and refugee settlements.
The lender also loaned Kenya Sh17 billion to strengthen of health system's resilience and response to health emergencies in Kenya.
The Public Finance Management Act, 2012 requires the Treasury Cabinet Secretary to submit a report to Parliament stating the loan balances brought forward, carried down, drawings and amortisations on new loans obtained from outside Kenya or denominated in foreign currency every quarter.
