President William Ruto has secured new support from Japan, including a yen-denominated loan and fresh aid commitments, after talks with Prime Minister Shigeru Ishiba in Tokyo on Wednesday, August 20.
Japan will provide up to 25 billion yen ($169.42 million) in Samurai financing to Kenya that will be directed towards boosting the East African nation’s vehicle assembly and energy sectors.
The agreement, backed by Nippon Export and Investment Insurance (NEXI), Japan’s state-owned trade insurer, will finance upcoming projects aimed at boosting Kenya’s infrastructure and economic growth.
“This facility will strengthen our local vehicle assembly and parts manufacturing industry while also addressing electricity transmission and distribution losses, currently standing at about 23% of our national output,” Prime CS Musalia Mudavadi said.
This comes after Rut and Ishiba met ahead of the Ninth Tokyo International Conference on African Development (TICAD 9), where Japan pledged additional assistance, including grant aid for the development of Mombasa Port.
Ruto Signs Yen-Denominated Loan Deal with Japan
“Prime Minister Ishiba reaffirmed Japan’s intention to work with Kenya under the Indian Ocean–Africa Economic Zone Initiative and highlighted progress in strengthening Kenya’s manufacturing sector through human resource development in the automotive and related industries.
“In addition, Prime Minister Ishiba welcomed the progress made in supporting the expansion of manufacturing production through development of human resources in the automotive and other industries, as well as the signing of the Term Sheet for a yen loan, backed by Nippon Export and Investment Insurance (NEXI),” a statement from the Japanese government said.
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In response, President Ruto expressed his gratitude for Japan’s support and stated his intention to continue to work closely together toward strengthening the bilateral trade relations and promoting further investment by Japanese companies.
However, the details on pricing and terms of the loan were not disclosed.
The deal builds on an agreement signed last February 2024 between Kenya and NEXI to expand financial cooperation.
NEXI’s insurance backing aims to reduce borrowing costs for sovereign borrowers by mitigating risks for investors.
Ruto stated that Japan is Kenya’s third-largest source of official development assistance, having provided more than $5 billion (KSh 650 billion) over the past 60 years.
He mentioned that the support has been channelled into major projects such as geothermal development in Olkaria and the expansion of Mombasa Port.
Ruto Calls for Balanced Trade with Japan as Kenya Seeks Market Access
President Ruto, in his speech at the conference, also acknowledged Kenya’s strong and steady ties with Japan but said there is a need to address the trade imbalance between the two countries.
Japan currently exports goods worth about $1 billion (Ksh130 billion) to Kenya, while Kenya’s exports to Japan amount to only $70 million (Ksh9 billion).
Also Read: Win for Kenya as Japan Eyes Historic Free Trade Deal
Ruto attributed the gap to tariffs and non-tariff barriers that limit Kenya’s market access.
He noted that Kenya is seeking greater entry into the Japanese market, especially for agricultural products such as avocados, flowers, and tea.
“To open the route to Japan for more Kenyan goods and products, Kenya is seeking talks between Kenyan and Japanese officials in an effort to unlock the latent potential between our two nations,” he said.
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