Kenya Secures $169M Japan Loan to Boost Automotive, Energy Sectors

Kenya has secured a 25 billion yen (approximately Sh22 billion) Samurai financing facility from Japan to boost its vehicle assembly and energy sectors. The funding, signed by Prime Cabinet Secretary Musalia Mudavadi and Nippon Export and Investment Insurance CEO Atsuo Kuroda during TICAD 9, will support Kenya's National Automotive Policy, foster local vehicle assembly and parts manufacturing, and reduce electricity transmission losses currently at 23 percent. The financing includes allocations for high-efficiency transformers to improve power reliability and technical training to prepare youth for the green automotive industry. Simultaneously, Kenya is negotiating with China to convert part of its dollar-denominated debt into yuan and extend repayment terms to reduce expensive borrowing costs, reflecting a broader strategy of shifting away from short-term financing risks. Additionally, Kenya and the United States have agreed to initiate formal negotiations on a reciprocal trade deal to succeed the expiring African Growth and Opportunity Act, aiming to secure long-term access for Kenyan products to the US market and attract investment. Both Japan and the US engagements highlight Kenya’s efforts to strengthen multilateral trade partnerships and economic resilience amid global financial volatility.