Co-op Bank Group Managing Director and CEO Gideon Muriuki during a past address. PHOTO | COURTESY

Co-operative Bank of Kenya has secured a $100 million (Ksh.12.9 billion) financing programme from the European Bank for Reconstruction and Development (EBRD) to expand access to competitively priced foreign currency funding for Kenyan businesses.

The bank has completed the first $50 million (Ksh.6.4 billion) tranche through a cross-currency swap transaction, which will increase its capacity to provide longer-term dollar financing to businesses, particularly those involved in exports and international trade.

The transaction is also the first cross-currency swap in Kenya to use the Kenya Shilling Overnight Interbank Average (KESONIA) as the benchmark reference rate, marking a development in the country’s financial markets.

Co-op Bank said the funding will support businesses in sectors including manufacturing, agriculture, agro-processing, horticulture, floriculture, logistics and tourism, which require foreign currency to purchase machinery, equipment, technology and raw materials.

The facility is expected to provide businesses with longer repayment periods, improved access to trade finance and working capital, and greater capacity to manage foreign exchange requirements linked to imports, exports and international contracts.

Co-op Bank Group Managing Director and CEO Dr. Gideon Muriuki said the first tranche would help businesses strengthen their competitiveness while supporting economic growth and job creation.

“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,” Dr. Muriuki said.

The EBRD’s Regional Head of Local-Currency Portfolio Management, Abdessamad Abouti, said the transaction demonstrated how financial-market reforms could move from design to implementation.

The partnership comes as Kenyan businesses seek longer-term financing to expand production, invest in technology and participate in regional and global value chains.

The bank said the broader programme will strengthen its ability to mobilise foreign currency funding and support enterprises whose revenues and supply chains are linked to international markets.

The transaction also deepens Co-op Bank’s partnerships with international financial institutions as it seeks to broaden funding options for Kenyan enterprises and support trade and investment.