NAIROBI, Kenya, June 22 – Kenya has secured a Sh22 billion financing package from Japan aimed at boosting local vehicle assembly, reducing energy losses and supporting government reforms as the country seeks to accelerate industrialisation and diversify its sources of funding.
The financing agreement between the Government of Kenya and Nippon Export and Investment Insurance was signed at State House, Nairobi, with the largest share of the facility earmarked for the automotive sector.
Of the total amount, Sh13.1 billion will support implementation of Kenya’s National Automotive Policy, which seeks to increase local vehicle assembly and value addition while reducing reliance on imported fully built units.
President William Ruto said the initiative is designed to create jobs, strengthen local manufacturing and retain more economic value within the country.
“For too long, Africa has imported what it could build and exported the jobs that come with it,” Ruto said during the signing ceremony.
The agreement was signed on behalf of Kenya by Treasury Cabinet Secretary John Mbadi and NEXI Chairman and Chief Executive Officer Atsuo Kuroda.
Ruto said local vehicle assembly would help build technical skills, deepen industrial capacity and improve Kenya’s trade balance by reducing dependence on imported vehicles.
The President linked the agreement to engagements undertaken during his visit to Japan in 2024 and Kenya’s participation in the Tokyo International Conference on African Development.
Kuroda said the financing arrangement originated from a memorandum of understanding signed between NEXI and the National Treasury during Ruto’s visit to Japan, culminating in the agreement reached in March 2026.
He noted that the initiative is expected to support industrialisation, job creation and the adoption of Japanese technology while advancing Kenya’s decarbonisation goals.
The second component of the package, valued at Sh5 billion, will finance the Reduction of Energy Losses Programme aimed at cutting electricity losses in the national grid and lowering energy costs.
Ruto described affordable and reliable electricity as a critical pillar for industrial growth and economic transformation.A further Sh4 billion will support Kenya’s broader reform agenda, including delivery of public services and protection of social investments.
The financing also marks Kenya’s entry into Japan’s capital markets through a Samurai bond structure, a move the government says will help diversify funding sources beyond traditional lenders.
Mbadi said the government is increasingly pursuing concessional financing with lower interest rates to reduce borrowing costs and ease pressure on public finances.
Trade Cabinet Secretary Lee Kinyanjui said the facility would help address long-standing challenges facing Kenya’s ambitions to develop a competitive local automotive manufacturing industry.
