Kenya is in advanced negotiations with China to raise 358 billion shillings (approximately $2.77 billion) on the Chinese financial markets to finance the resumption of the standard gauge railway (SGR) project between Naivasha and Malaba, at the Ugandan border. The financing would involve the issuance of a Panda Bond, a yuan-denominated bond issued by a foreign country and sold on the Chinese market.
China, already the main financial partner for the first two phases of the SGR (Mombasa-Nairobi and Nairobi-Naivasha), would once again play a key role through this new bond issuance structure. Two Kenyan Treasury officials are currently in China to finalize the technical details of the issuance.
“The amount is set at 358 billion shillings. A mission is underway to structure the operation. The principle is agreed upon, even though we are still at the conceptual stage. Within two or three weeks, the financing structure should be clear,” a source close to the matter revealed.
Foreign Affairs Minister Musalia Mudavadi confirmed that Nairobi is counting on Beijing’s support to launch the Panda Bond at the beginning of the next budgetary exercise. The project could thus be unlocked by the end of the year 2025.
