China has postponed debt repayment for Ksh 27 billion ($245 million) due in the first six months of 2020. Treasury CS Ukur Yattani confirmed the agreement to defer the debt, whose first semi-annual payment date was Thursday, January 21 on a Spice FM interview.
“We are also happy to announce our that our engagement with China where we hold about Ksh 27 billion which was due for payment between now and June, we now not going to pay immediately but we are going to pay in the future,” said the Treasury CS.
Yattani says the deferment will give Kenya the liquidity it desires to honour its other obligations, such as financing the national and country governments.
China is by far Kenya’s biggest bilateral lender, constituting up to 21% of the country’s external debt by June 2020.
The news comes only days after the Paris Club suspended loan repayments due between January and June 2021 for four years, estimated at close to Ksh 33 billion.
Kenya is pursuing waivers for approximately KSh 40.6 billion in debt from G20 countries. However, the government will not seek repayment suspension from multilateral and commercial lenders to safeguard the countries sovereign rating and access to international financial markets.
Kenya was set to start paying its Nairobi- Naivasha Standard Gauge Railway loan in 30 instalments between January 21, 2021, and July 21, 2035, with an interest rate of 3% above the London Interbank Offered Rate (Libor).