China in Talks With Kenya for Debt Relief After Paris Club Deal

Pedestrians walk in downtown Nairobi, Kenya, on Saturday, Dec. 5, 2020. Kenya is seeking a loan of as much as $2.3 billion from the International Monetary Fund under the lender’s extended fund facility. Photographer: Fredrik Lerneryd/Bloomberg
Pedestrians walk in downtown Nairobi, Kenya, on Saturday, Dec. 5, 2020. Kenya is seeking a loan of as much as $2.3 billion from the International Monetary Fund under the lender’s extended fund facility. Photographer: Fredrik Lerneryd/Bloomberg

(Bloomberg) -- China is in talks with Kenya on a debt-service suspension deal, its embassy in Nairobi said, days after the Paris Club agreed to delay $300 million in payments by the East African nation.

China signed payment suspension agreements with 12 African countries and gave waivers on mature interest-free loans for 15 African nations under the G-20 framework, the embassy said in an emailed statement, without providing details. The China International Development Cooperation Agency and the Export-Import Bank of China implemented all eligible debt suspension requests from the nations, it said.

Kenya’s second-biggest external creditor after the World Bank said it “attaches great importance to debt suspension and alleviation in African countries including Kenya and is committed to fully implementing the G-20 Debt Service Suspension Initiative,” according to the statement.

Kenya applied for waivers under the DSSI framework for about 40.6 billion shillings ($368.7 million) due in the first half of this year.

Chinese loans comprised 21% of Kenya’s external debt, compared with the World Bank’s 25% at the end of June 2020, according to a National Treasury report. Sovereign bondholders held another 19%, commercial banks 11% and the African Development Bank 7.5%.