Kenya is in talks with China to convert dollar loans into yuan, aiming to cut interest costs and ease debt servicing pressures.
Kenya in Talks With China to Convert Dollar Debt Into Yuan
Nairobi, August 27, 2025 – Kenya has entered negotiations with China to restructure part of its dollar-denominated debt into yuan, Treasury Secretary John Mbadi announced on Wednesday.
The plan could lower interest costs by nearly half while easing pressure on public finances. “The moment we move from US dollar to renminbi, automatically, the interest rate reduces by almost half,” Mbadi said. “To us, that is a big saving.”
Railway Loans Under Review
Talks are centered on loans from the Export-Import Bank of China, which financed Kenya’s $5 billion Standard Gauge Railway (SGR). The project, Kenya’s largest infrastructure scheme since independence, links the port of Mombasa to Nairobi and extends to Naivasha.
Servicing these loans is expected to account for about a quarter of Kenya’s external debt repayments in the fiscal year ending June 2025.
Debt Snapshot
Treasury data show Kenya’s external debt stock stood at $40.5 billion in March 2025. This includes $14.4 billion owed to the World Bank, $7.52 billion in Eurobonds, and $5.04 billion to China.
China remains Kenya’s largest bilateral lender, with repayments of about $1 billion due annually.
Beijing’s Position
Although Beijing has not confirmed the talks, China’s Foreign Ministry said it will continue to “promote practical cooperation with Kenya and other African countries,” according to Bloomberg.
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