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Kenya to Sell $2bn Eurobonds for Infrastructure Investment

Treasury Secretary Henry Rotich says “we have massive infrastructure plans”

Kenya has big plans for its infrastructure. So big in fact that it will sell $2bn of Eurobonds to help finance the projects. The 10 year bonds are likely attract a yield of around 8% which will become one of the biggest foreign debts in Africa.

Kenya is aiming to double its economic growth to 10 percent in order to support its growing population. Treasury Secretary Henry Rotich said the bulk of the money from the bonds will be used to kick start drilling for geothermal energy. According to Bloomberg the Kenyan government estimates it will take $15bn to create an additional 5,500 megawatts by 2017. Mr Rotich said We have opened up the geothermal energy sector to the private sector, but we have to take the initial risk of drilling the steam.

Speaking about the changing status of Kenya, Mr Rotich said…

We are reaching a level where the lending facilities at the IMF are no longer suitable for us, because we are to graduate to probably emerging market status. At the same time we are still vulnerable to shocks that affect our economy like oil price shocks, weather vagaries, et cetera, so we want a program or engagement with the IMF that continues to insulate us from any shocks.

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