NAIROBI, Kenya, Sept 17 – Co-operative Bank of Kenya and the European Bank for Reconstruction and Development (EBRD) have entered into a Sh13 billion ($100 million) financing programme to expand access to foreign currency funding for Kenyan businesses.

Co-op Bank said on Wednesday that the first Sh6.5 billion ($50 million) tranche had been executed through a cross-currency swap, becoming the first such transaction to use the Kenya Shilling Overnight Interbank Average (KESONIA) as a benchmark reference rate.

The financing will target businesses linked to international markets and foreign currencies, including those in manufacturing, agriculture and agro-processing.

“The transaction is the first use of a broader US$100 million facility agreed between the two institutions,” Co-op Bank said.

The bank said the programme will increase its capacity to provide long-term foreign currency funding, allowing businesses to access dollar-denominated loans at competitive rates and longer repayment periods.

Co-op Bank customers will also have increased access to trade finance and working capital facilities, particularly for exporters and businesses involved in regional and global value chains.

The programme will also support businesses managing foreign exchange requirements arising from imports, exports and international contracts.

Co-op Bank Group Managing Director and CEO Gideon Muriuki said the first tranche would increase the bank’s capacity to provide long-term foreign currency financing.

“The first US$50 million tranche enhances our ability to provide long-term, competitively priced foreign currency financing to help businesses strengthen their competitiveness while contributing to Kenya’s economic development and job creation,” Muriuki said.

EBRD Regional Head of Local-Currency Portfolio Management Abdessamad Abouti said the partnership reflects the bank’s focus on developing local capital markets.