Kenya secures Sh22 billion from Japan for vehicle assembly

The facility announced during ceremony attended by President Ruto and Japan’s PM Ishiba

by Paul Ilado in Yokohama, Japan

News22 August 2025 - 05:30

In Summary

Prime Cabinet Secretary Musalia Mudavadi emphasised that this financing will help reduce electricity losses, which currently account for about 23 per cent of Kenya's national output.
The agreement was signed with Atsuo Kuroda from Nippon Export and Investment Insurance during the Ninth Tokyo International Conference on African Development (TICAD 9).

Japan plans to provide Kenya with up to Sh22 billion in Samurai financing.

This funding aims to boost the local vehicle assembly and parts manufacturing industry by lowering electricity costs.

Prime Cabinet Secretary Musalia Mudavadi emphasised that this financing will help reduce electricity losses, which currently account for about 23 per cent of Kenya's national output.

The agreement was signed with Atsuo Kuroda from Nippon Export and Investment Insurance during the Ninth Tokyo International Conference on African Development (TICAD 9).

“This partnership reflects Kenya’s bold and forward-looking strategy to diversify funding sources, unlock new opportunities for our people, and deepen ties with Japan as a trusted partner in Africa’s transformation story,” Mudavadi said.

The facility was announced during a ceremony attended by President William Ruto and Japan’s Prime Minister Shigeru Ishiba.

Mudavadi noted that the funds will drive industrial growth, create jobs and encourage innovation in the automotive sector, including electric vehicle production.

This financing aligns with Kenya’s National Automotive Policy, which aims to boost local manufacturing and gradually phase out the importation of used vehicles.

Mudavadi said the Samurai financing will enhance the entire automotive value chain and promote research and development.

Additionally, the funding will improve energy efficiency, lowering electricity costs and supporting Kenya’s development goals.

Mudavadi highlighted that this partnership reflects Kenya's strategy to diversify funding sources and strengthen ties with Japan.

The Samurai facility has a seven-year term. The National Treasury will sign an agreement with NEXI to facilitate credit access for the ministries of Investment, Trade and Industry and Energy.

The Ministry of Investment will receive Sh13.1 billion to support local manufacturers in producing energy-efficient vehicles, reducing reliance on imported used cars that contribute to carbon emissions.

The Ministry of Energy will get Sh4.8 billion to tackle electricity losses by improving the transmission and distribution system.

The remaining Sh3.9 billion will be allocated to various national development projects, enhancing fiscal stability.

Mudavadi expressed gratitude to Japan for its support in Kenya’s Bottom-Up Economic Transformation Agenda, which aims to foster economic growth and shared prosperity for all Kenyans.