NAIROBI (Realist English). Kenya is preparing to restructure part of its multibillion-dollar Chinese railway debt by converting it from US dollars into yuan, a move expected to ease repayment pressures and advance Beijing’s efforts to expand the global role of its currency.
Kenya’s Treasury said negotiations with the Export-Import Bank of China are at an advanced stage to extend maturities and swap the loans taken for the Standard Gauge Railway (SGR) into yuan. If finalised, the deal would halve interest costs from 6.37% on existing dollar terms to around 3% in yuan, Treasury Minister John Mbadi confirmed.
The East African nation borrowed about $5bn (35bn yuan) in 2014 and 2015 to finance the 480-km SGR linking Mombasa to Nairobi, as well as a 120-km extension to Naivasha in the Central Rift Valley. The shift reflects the difference between the secured overnight financing rate in dollars (4.6%) and lower yuan borrowing rates.
Analysts say the restructuring could set a precedent for other developing nations with heavy Chinese debt, providing a new model for easing repayment burdens while reducing reliance on the US dollar. For Beijing, it represents another step in internationalising the yuan and embedding it more deeply in global financial transactions.
