Kenya has borrowed $1.5 billion (Sh193.8 billion) from international markets to help pay part of its 2028 Eurobond ahead of time.
The move is aimed at reducing pressure on taxpayers and avoiding a big one-time repayment when the bond matures.
The money was raised through two loans a 7-year and a 12-year bond, both at an average interest rate of 8.7 per cent.
According to National Treasury PS Chris Kiptoo, this is about one per cent cheaper than what Kenya would have paid at the start of the year.
“By securing this deal, the Government has also smoothened and lengthened loan repayments, giving Kenya more breathing space in managing its finances,” said Kiptoo.
Treasury argues that the move to cushion against bullet payment in 2028 has enabled the government to spread out its debt repayments over a longer period, giving the country more time and flexibility.
According to Kiptoo investor interest was strong towards refinancing the loan. Kenya asked for $1.5 billion, but global investors offered over $7.5 billion — five times more than needed.
Most of the support came from large fund managers in the US and UK, which the Treasury says is a sign of renewed confidence in Kenya’s economy.
This is the third such debt deal since 2024, when government struggled to mobilise bullet payments for the SGR debt.
Treasury points out that early repayment will lower interest costs, make debt management easier, and create room to fund key development projects in roads, health and education.
Kenya is specifically targeting the $1 billion Eurobond that is due in February 2028.
By buying back some of it now, the government hopes to avoid the shock of repaying the full amount in one go.
Kenya is looking to ease the repayment pressure on the 2028 maturing euro bond with an early buyback proposition.
