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Overview

China Development Bank provides $600 million loan to finance the Kenyan Government's budget deficit

Commitments (Constant USD, 2023)$654,432,944
Commitment Year•2016Country of Activity•KenyaDirect Recipient Country of Incorporation•KenyaSector•Government And Civil SocietyFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 20, 2016
Start (actual)
Jun 1, 2016
First repayment (originally scheduled)
Nov 20, 2019
Last repayment (originally scheduled)
May 2, 2023

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Government Agencies

  • Government of Kenya

Loan description

China Development Bank provides $600 million loan to finance the Kenyan Government's budget deficit

Grace period•3.5 yearsGrant element•15.41%Interest rate (t₀)•5.9054%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•7 years

Narrative

Full Description

Project narrative

On May 20, 2016, China Development Bank provided a $600 million loan to finance the Kenyan Government's budget deficit. The loan carried an interest rate of 6-month LIBOR plus 495 basis points (4.95%). The borrower was responsible for repaying the loan in semi-annual installments between November 20, 2019 and May 20, 2023, which implies a maturity of 7 years and a grace period of 3.5 years. The proceeds of the loan were to be used by the borrower help fund the government’s budget deficit in Fiscal Year 2015/16 year. The loan fully disbursed. The borrower made principal repayments worth $75,000,000 between July 1, 2020 and June 30, 2021 (Fiscal Year 2020-2021) and $162,500,000 between July 1, 2021 and June 30, 2021 (Fiscal Year 2021-2022). The loan’s amount outstanding was $412,500,000 as of June 30, 2020, $337,500,000 as of June 30, 2021, and $175,000,000 as of June 30, 2022. In May 2023, the Kenyan Treasury reported that the $600 million CDB repaid would be fully repaid by June 2023.

Staff comments

1. The loan identification number in the Government of Kenya’s public debt register is 2016038 (2016038_1). 2. The average 6-month LIBOR rate in May 2016 was used to estimate the all-in interest rate (4.95% + 0.933% = 5.883%). 3. The amounts outstanding and repayments data are drawn from the Kenyan Treasury’s External Public Debt Register. See https://www.dropbox.com/s/549ixt2gj1jbjvi/External-Public-Debt-Register-as-at-End-June-2022.pdf?dl=0 and https://www.dropbox.com/s/0et4jg1qfg1bo7r/External-Public-Debt-Register-as-at-End-June-2021.pdf?dl=0 and https://www.dropbox.com/s/233j706743q7f1g/External-Public-Debt-Register-as-at-End-June-2020.pdf?dl=0 and https://www.dropbox.com/s/qkoybr9ja0ohemy/External-Public-Debt-Register-as-at-End-June-2009.pdf?dl=0 and https://www.dropbox.com/s/thy3s6ggjcjd97z/External-Public-Debt-Register-as-at-End-June-2012.pdf?dl=0 and https://www.dropbox.com/s/fzbfq01vas6m0i9/External-Public-Debt-Register-as-at-End-June-2019.pdf?dl=0 and https://www.dropbox.com/s/ennrl6d4zd2nizs/External-Public-Debt-Register-as-at-End-June-2018.pdf?dl=0 and https://www.dropbox.com/s/8ibazrj1a8oho2d/External-Public-Debt-Register-as-at-End-June-2017.pdf?dl=0 and https://www.dropbox.com/s/wdbjl0wq49i09x1/External-Public-Debt-Register-as-at-End-June-2015.pdf?dl=0