Kenya seeks panda bond financing to boost infrastructure development

Kenya is pursuing entry into China's capital markets through the issuance of a panda bond, as part of a broader strategy to diversify infrastructure financing and mobilize private sector capital for priority development projects.

Korir Sing'oei, Kenya's principal secretary for foreign affairs, said the tapping of renminbi-denominated financing will support investments in water, energy and road infrastructure, while strengthening long-term financial cooperation with China.

"We discussed Kenya's potential participation in the Chinese capital markets through the issuance of a Panda Bond, which would enable us to mobilize private sector capital to finance priority projects across the country," Sing'oei said on his official X post on Wednesday.

The talks were held in Beijing during a meeting with the China Development Bank, where the Kenyan delegation expressed the government's appreciation for $287 million in financing committed to the construction and upgrading of 15 county connectivity roads across the country.

According to Sing'oei, the road projects are expected to enhance last-mile connectivity, lower transport costs and stimulate economic activity at the devolved levels.

"This financing will directly support county connectivity roads, which are critical to unlocking local economic potential and strengthening national integration," he stated.

Kenya's exploration of a panda bond comes as African participation in China's capital markets begins to gain momentum.

In October 2023, Egypt became the first African country to issue a panda bond, raising 3.5 billion RMB through a sustainability-linked bond backed by partial guarantees from the African Development Bank and the Asian Infrastructure Investment Bank, with the proceeds directed toward financing green and inclusive development projects.