EBRD supports growth of Kenya’s local-currency market

• First time that KESONIA has been used in a cross-currency swap transaction
• Landmark US$ 50 million agreement forms part of wider US$ 100 million programme
• Facility will help to expand access to financing denominated in Kenyan shillings

The European Bank for Reconstruction and Development (EBRD) has concluded a US$ 50 million (€43.1 million) cross-currency swap agreement with the Co-operative Bank of Kenya that will help to expand access to financing denominated in Kenyan shillings.

This is the first time that the Kenya Shilling Overnight Interbank Average (KESONIA), Kenya’s new reference rate for financial transactions, has been used for such an agreement. It is also the first use of a broader US$ 100 million (€86.2 million) facility agreed between the two institutions.

By using KESONIA in a live market transaction, the EBRD and the Co-operative Bank of Kenya are showing how the new rate can work in practice. This will help to build confidence in the benchmark, encourage its use and support the development of Kenya’s local financial markets.

The swap will strengthen the EBRD’s ability to raise and manage funding in Kenyan shillings. This will enable the Bank to provide more financing in local currency, helping businesses to avoid taking on unnecessary foreign-exchange risk when their income is mainly in Kenyan shillings.

Abdessamad Abouti, Regional Head of Local-Currency Portfolio Management at the EBRD, said: “This is an important milestone for Kenya’s financial markets. We have worked closely with local authorities and market participants to support the development of KESONIA, and this swap shows how reforms can move from design to implementation, reflecting the EBRD’s longstanding commitment to developing local capital markets.”

Mutahe Karuoro, Treasurer, at the Co-operative Bank of Kenya, said: "This is a pleasing moment for The Co-operative Bank and for Kenya. Bringing KESONIA to life has been a collective journey — one built on trust, technical rigor, and a shared vision for our financial markets. This swap is a first, but it will not be the last. It opens the door for greater liquidity, better price discovery, and stronger participation from local and international investors. We are excited about what lies ahead."

With Kenya continuing its transition towards internationally recognised standards, KESONIA-linked transactions are expected to play an increasingly important role in fostering transparent pricing, improving risk management practices and attracting greater participation from domestic and international investors.

The EBRD began investing in Kenya in 2025, focusing on private-sector development, financial inclusion, sustainable infrastructure and the green transition.