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Kenya Cuts Annual Debt Servicing Costs by $215mn on Converting Dollar Railway Loans to Yuan
October 8, 2025
Kenya converted its Chinese railway loans from dollars to yuan, thereby effectively cutting annual debt-servicing costs by $215mn. The country took $5mn in loans from the Export-Import Bank of China for a standard gauge rail line to connect its port city of Mombasa to a town just outside the capital, Nairobi. About $3.5bn was still unpaid by June 2024, according to the government’s debt register. Kenya spends $1bn annually on servicing its debts to China. Details about the interest rate charged and the tenor of the yuan loans were not divulged. Plans for a panda bond have also been put on hold because “the rates are not favorable”, the Kenyan cabinet secretary said.
Kenya spends more than half of its tax revenue on servicing debt and is now reorganizing both its domestic and foreign borrowing to spread out maturities that were bunched up over the coming decade. It needs about $26bn for external debt redemptions over the next decade, plus roughly $1.5bn in annual interest payments. Other than the yuan conversion, it’s also refinanced three offshore bonds to lengthen their maturities, albeit at higher rates. In addition, it’s arranging a $1bn debt-for-food swap, for which the US DFC has agreed to provide guarantees.
Kenya’s 6.3% 2034s were trading stable at 87.86 on the dollar yielding 8.46%.
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