Kenya to borrow $750 million more from debut Eurobond, despite IMF warning
Kenya plans to borrow an additional $750 million (€600 million) to finance development projects by re-opening its international bond issued in June that raised $2 billion, Reuters reports.Kenya plans to borrow an additional $750 million (€600 million) to finance development projects by re-opening its international bond issued in June that raised $2 billion, Reuters
"The National Treasury on behalf of the government seeks to tap (increase) the recently issued sovereign bond for an amount not exceeding $750 million to finance on-going development projects," Treasury Secretary Henry Rotich said in a statement on Wednesday (November 19th).
The move comes a few weeks after
the International Monetary Fund (IMF) has warned African States against rushing to issue Eurobonds, saying they may face exchange rate risks and problems repaying debts.
It said African governments facing falling levels of foreign aid are on a borrowing spree to pay for new roads, power stations and other infrastructure, prompting concern this could raise debt levels and undermine growth.
"It comes with some risks," the director of the IMF’s African Department, Antoinette Sayeh, told Reuters. "Whereas what it costs the countries to issue these bonds can often look lower than what they would pay on domestic borrowing... the real cost in the final analysis will also depend on the evolution of exchange rates in the course of the life of the bond issuance."