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National Treasury has revealed that it is reviewing its external loan options even as it seeks ways to attract more investments into sustainable financing.

Principal Secretary Julius Muia said unlike in the past when the government went for syndicated loans like Eurobond to fund its projects, they are now open to other options following a reduction in interest rates in the international market.

He said moving forward it will focus on attracting more financing on adaptation and resilience rather than mitigation as is the current set up.

“Interest rates are coming down, yield rates are correcting themselves, we are leaving our options open. What we look for first is to ensure that we have got as much concessional financing as possible in our books because that helps in keeping the cost of financing and funding government operations as low as possible,” said Muia.

State to snub syndicated loans in new funding plan

He stated that it is essential for the government to ensure that it gets the best in the cost and risk of capital of any funding it gets.

Muia was speaking on the sidelines of Kenya Bankers Association (KBA) Annual Banking  Research Conference that sought ways to address key emerging developments in the financial services  sector, from both the local and global perspectives.

Sustainable financing has remained elusive in Africa despite the continent bearing the greatest brunt of climate change being the least contributor to global gas emissions.

Kenya, just like other countries, is already experiencing impacts of climate change such as rising lakes in Rift Valley, warming and drought cycles in some counties.

According to available data, at least 3.5 million people in Kenya have been affected and need drinking water.

Muia said sustainable financing will be the key focus of COP27 in Egypt this year because Africa requires more financing to deal with adaptation and resilience yet over 90 per cent of sustainable financing goes to mitigation. universities.