Co-op Bank Teams Up with EBRD on $100m Currency Swap Deal

Co-op Bank of Kenya has partnered with the European Bank for Reconstruction and Development (EBRD) to expand access to foreign currency financing for Kenyan businesses. The program is worth Sh13 billion ($100 million), with the first $50 million tranche executed through a cross-currency swap transaction using the new benchmark reference rate, KESONIA.

The partnership aims to strengthen Co-op Bank's capacity to provide long-term dollar financing at competitive pricing and will particularly benefit businesses in export-orientated sectors such as manufacturing, agriculture, agro-processing, horticulture, floriculture, logistics, and tourism.

Economists say the program will improve access to foreign currency financing, provide longer repayment periods, and increase the availability of trade finance and working capital facilities for exporters. It will also support businesses involved in regional and global value chains and help them manage foreign exchange requirements linked to imports, exports, and international contracts.

Co-op Bank Group Managing Director and CEO Gideon Muriuki described the partnership as an important development for the bank's financing of Kenyan businesses. EBRD Regional Head of Local-Currency Portfolio Management Abdessamad Abouti said the transaction was significant for Kenya's financial markets, demonstrating how reforms could move from design to implementation.