Kenya will hold off on drawing funds from a $1.5 billion privately placed bond from the United Arab Emirates to align with its fiscal plans, Finance Minister John Mbadi announced. The decision comes as the country seeks to manage its finances amid rising debt service costs.
Kenya recently issued a new $1.5 billion 10-year bond to refinance upcoming maturities and expects over $950 million in funding from external sources like the World Bank, the African Development Bank, Italy, and Germany by June.
The UAE loan, agreed upon last year, carries an 8.25% interest rate and will be repaid in $500 million installments in 2032, 2034, and 2036. Mbadi stated that the funds could be used for liability management or budgetary support but will only be accessed after assessing the budget gap.
President William Ruto has strengthened trade ties with the UAE since taking office, with the Gulf nation emerging as a key lender as China scales back loans to Africa.