The Co-operative Bank of Kenya has partnered with the European Bank for Reconstruction and Development (EBRD) under a US$100 million financing programme aimed at expanding access to competitively priced foreign currency financing for Kenyan businesses.
The programme will strengthen Co-op Bank’s capacity to provide long-term dollar-denominated financing to businesses operating in key sectors of the economy, including manufacturing, agriculture, agro-processing, horticulture, floriculture, logistics and tourism.
The first US$50 million tranche of the programme has been successfully executed through a cross-currency swap transaction, marking the first utilisation of the broader US$100 million facility agreed between the two institutions.
The transaction is also significant for Kenya’s financial markets as it is the first cross-currency swap transaction to utilise the Kenya Shilling Overnight Interbank Average (KESONIA), the country’s new benchmark reference rate.
According to Co-op Bank, the financing programme will enable the lender to mobilise and deploy longer-term foreign currency funding, allowing businesses to access dollar financing at competitive rates and with longer repayment periods.
The facility is expected to particularly benefit export-oriented businesses and companies whose revenues, supply chains or operations are linked to international markets and foreign currencies.
Through the partnership, businesses will have improved access to foreign currency financing, longer repayment tenors, and enhanced trade finance and working capital facilities.
The financing will also support companies participating in regional and global value chains while helping businesses manage foreign exchange requirements associated with imports, exports, and international contracts.
Businesses will further be able to access funding for machinery, equipment, technology, raw materials, and other strategic inputs required to expand operations, modernise production, and improve competitiveness.
Dr. Gideon Muriuki, Group Managing Director and CEO of The Co-operative Bank of Kenya, said the partnership represents an important milestone in the bank’s efforts to provide innovative financing solutions to Kenyan enterprises.
“Our partnership with the EBRD under this US$100 million currency swap programme represents an important milestone in our commitment to supporting Kenyan businesses with innovative financing solutions,” Muriuki said.
He added that the first US$50 million tranche would enhance the bank’s ability to provide long-term and competitively priced foreign currency financing, helping businesses strengthen their competitiveness while contributing to economic development and job creation.
EBRD Regional Head of Local-Currency Portfolio Management Abdessamad Abouti said the transaction was an important milestone for Kenya’s financial markets.
He noted that the EBRD had worked with local authorities and market participants to support the development of KESONIA, adding that the swap demonstrates how financial market reforms can progress from design to implementation.
The financing programme aligns with Co-op Bank’s broader focus on supporting productive sectors, employment creation, and export earnings.
The lender said it will continue working with international financial institutions such as the EBRD to broaden access to funding, support international trade and investment, and provide financial solutions aimed at enabling Kenyan businesses and communities to grow.