The Treasury is set to make a comeback in the commercial market to acquire a new Eurobond loan estimated at Ksh 125 billion.
According to the Public debt Management Office Director-General Haron Sirima, the government is planning to use part of the new loan to offset its previous Eurobond loans which have already matured.
"In the event that we will not raise concessionary funding by June, we may need to raise additional resources to bridge that gap,” Sirima said.
The new loan will add to Kenya's current debt which stands at Ksh7.3 trillion.
The fourth Eurobond loan will bring the total to Ksh 734 billion, Kenya’s stock of Eurobond.
The money will be used to offset principal repayment of Ksh351 billion that can either be repaid using borrowed money or refinanced.
Kenya is also seeking Ksh10 billion from the World Bank to help in procuring the next Covid-19 vaccines.
The Treasury did not allocate Ksh4.5 billion which was to be used in the next phase of Covid-19 vaccination expected to start in July.
“We are engaging the World Bank for a credit facility of Ksh10 billion. The process is ongoing at the National Treasury,” Health chief administrative secretary Mercy Mwangangi said.
According to the National Treasury Cabinet Secretary Ukur Yatani, the government had contracted many sectors from 2020 for funding and future plans for borrowing are inevitable.
“We have to borrow at some point. However, we shall only borrow concessionary, that is why we went for IMF loans,” Yatani said.
So far Kenya has received over Ksh500 billion from lending institutions and the focus is now on a new source to fund the Ksh3.01 trillion budget.
The government’s first Ksh280 Eurobond loan was taken in 2014. Four years later, the government went for another Eurobond loan amounting to Ksh202 billion.
