IFC and Citi Announce $65M Finance Facility to Boost Digital Infrastructure in Kenya

Under this facility, Citi will provide IFC with access to Kenyan shillings, which IFC will then on-lend to a project aimed at expanding digital infrastructure in the country.

The International Finance Corporation (IFC) and Citi have unveiled a $65 million equivalent Kenyan shillings finance facility to enhance IFC's capability to provide local currency financing in Kenya.

Under this facility, Citi will provide IFC with access to Kenyan shillings, which IFC will then on-lend to a project aimed at expanding digital infrastructure in the country. This marks the first such facility globally between IFC and Citi, and Citi's inaugural long-term local currency facility to a multilateral development bank. The two institutions intend to replicate this facility for future projects in Kenya and other countries in Africa and beyond.

John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization, emphasized the significance of local currency financing amid currency volatility and debt distress. "By partnering with Citi, IFC can expand its ability to source local currency financing to provide local currency solutions for our clients and help shield them from currency fluctuations," Gandolfo said.

Julie Monaco, Global Head of Public Sector Banking at Citi, expressed pleasure in partnering with IFC to develop innovative local currency solutions. "This inaugural Citi facility with IFC in Kenya is a first-of-its-kind solution and has the strong potential for replication across our emerging market franchises. By working strategically with multilateral development banks and development finance institutions, Citi's local currency platform addresses currency mismatches and foreign exchange risk, especially prominent in continents like Africa, which then accelerates financing for development projects," Monaco stated.

The availability of local currency financing is crucial for businesses in emerging markets and developing economies. Borrowing in foreign currencies such as the US dollar, while earning revenues in local currency, exposes companies to large exchange rate movements that can increase their debt burdens and undermine financial stability.

IFC offers a wide range of local currency products to its clients, including loans, bond investments, cross-currency swaps, securitizations, guarantees, and risk-sharing facilities. Between July 2023 and June 2024, IFC committed $5.9 billion in local currency financing, representing more than 30 percent of its long-term debt commitments. Over the last decade, IFC has committed over $30 billion in more than 70 local currencies.