By KPC Reporter
Kenya has secured a financial boost from Japan that is set to transform the country’s automotive industry and ease the cost of electricity for millions of consumers.
On Thursday, the government signed a Statement of Intent for a 25 billion yen financing facility, equivalent to about Sh22 billion, during the Ninth Tokyo International Conference on African Development (TICAD 9) in Yokohama.
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The agreement was witnessed by President William Ruto and Japan’s Prime Minister Shigeru Ishiba.
Prime Cabinet Secretary and Foreign Affairs Cabinet Secretary Musalia Mudavadi, who represented Kenya at the signing, hailed the facility as a game-changer for the country’s economic transformation.
He inked the deal with Nippon Export and Investment Insurance (NEXI) Chairman and CEO Atsuo Kuroda, describing it as a bold step that will stimulate Kenya’s automotive value chain, create new industries, foster innovation, and deliver cheaper and more reliable electricity to Kenyans.
The financing, known as the NEXI Samurai Facility, carries a seven-year maturity and is part of Kenya’s broader strategy to diversify funding sources at a time when traditional borrowing avenues are narrowing.
A significant portion of the funds—about Sh13.1 billion—will go to the Ministry of Investment, Trade and Industry to support local vehicle assemblers and manufacturers of parts.
The move is expected to gradually reduce the importation of used cars and spares, while positioning Kenya as a continental hub for the production of energy-efficient and environmentally friendly vehicles.
A technical training component will also be included to equip Kenyans with skills for the emerging green automotive industry.
The Ministry of Energy will receive Sh4.8 billion to tackle inefficiencies in the national power grid, which currently loses about 23 percent of generated electricity during transmission.
The funding will finance the purchase and installation of high-efficiency transformers across the country and train engineers to manage them, a development that is expected to cut electricity costs for both households and businesses.
The balance of Sh3.9 billion will support budgeted government expenditures, helping the National Treasury stabilize public finances and free up resources for development.
Speaking after the signing, Mudavadi expressed appreciation to the government of Japan for its support of Kenya’s Bottom-Up Economic Transformation Agenda.
He said the Samurai financing would accelerate progress in priority value chains, spark industrial growth, and deliver shared prosperity for ordinary Kenyans.
