Kenya has secured financial agreements totaling Kes448.8 billion from Japan aimed at key growth projects, reflecting a forward step in revamping the nation’s economy.
At the forefront of these agreements are critical projects such as the Dongo Kundu Infrastructure Ecosystem and the Mombasa Gateway Bridge, situated along the coastal region, with a combined investment of Kes260 billion.
These infrastructure projects hold the promise of enhancing connectivity, facilitating trade, and unlocking economic potential in Kenya’s coastal region.
In a landmark move, President Ruto and Prime Minister Fumio Kushida affirmed Kenya’s commitment to issue a Kes40 billion Samurai bond in Japan.
This bond, intended to finance energy and infrastructure projects, is part of strengthening economic ties between the Kenya and Japan nations. The Samurai bond agreement, facilitated by Japan’s Nippon Export and Investment Insurance, signifies confidence in Kenya’s growth trajectory and paves the way for increased investment opportunities.
The Samurai bond, a yen-denominated bond subject to Japanese regulations, represents a financing instrument that diversifies Kenya’s funding sources for development at a time marked by reduced revenue collections amid huge debt obligations.
Moreover, during Dr Ruto’s tour of Japan, Kenya secured Kes30 billion from the Japan Bank for International Cooperation to acquire heavy machinery and mechanized assets, essential for bolstering productivity and efficiency across various sectors.
Additionally, the Olkaria Geothermal Development Project, is slated to receive Kes15 billion, a financing boost that is poised to expand the plant’s renewable energy capacity and help address the country’s energy demands sustainably.
Japan’s commitment to supporting Kenya’s healthcare infrastructure is expected to strengthen with its provision of Kes1 billion for the production of medical oxygen, crucial for enhancing healthcare delivery and resilience in the face of health challenges.
Furthermore, humanitarian aid amounting to Kes320 million, which will be facilitated through the United Nations, signals Japan’s solidarity with Kenya in addressing humanitarian crises, such as those arising from El Nino-related floods.
Beyond infrastructure and healthcare, the agreements will extend to cooperation in key sectors including ICT, finance, and security.
One of the deals includes a Memorandum of Understanding (MoU) aimed at enhancing the capacity of the Kenya Medical Research Institute (KEMRI), with an investment of Kes3 billion.
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This initiative underscores Japan’s commitment to bolstering Kenya’s healthcare system and addressing public health challenges effectively.
Also in the agreements includes a plan that will see Kenya solidify its defense partnership with Japan through a Defense Cooperation agreement, making Nairobi as the first African country to enter into such an agreement with East Asian nation.
This is part of the growing strategic partnership between Kenya and Japan and highlights Tokyo’s recognition of Nairobi’s pivotal role in regional security. President Ruto lauded Japan’s steadfast support in advancing Kenya’s development agenda.
Energy and vehicle manufacturing
Earlier in his tour of Japan, Dr. Ruto witnessed the signing of an agreement between Kenya and Toyota Tsusho Corporation, which has committed to invest Kes800 million in the Kenya Thika Vehicle Manufacturers project.
On renewable energy development, the Japanese multinational will further invest Kes15 billion in Meru Wind Farm Energy, Kes8 billion in Isiolo Solar Energy, and Kes75 billion in Menengai Geothermal Plant.