cross-posted from : https://lemmy.zip/post/66691399

Ethiopia, Mozambique, Zambia, Pakistan and Indonesia reportedly seek to switch loans currency to yuan

Kenya took a similar move in 2025, change of terms saved Nairobi $215 million annually

  • Hotznplotzn@lemmy.sdf.org
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    1 day ago

    Will Kenya’s revenue streams - such as those gained from the country’s exports and other unrelated income - be used as collateral for the Chinese debt as it is usually the case with Chinese loans?

    If interested:

    How China Collateralizes

    As security, they [Chinese lenders] use liquid, easily accessible assets, such as cash in bank accounts located in China. They rarely take infrastructure project assets as collateral, but often rely for repayment on established commodity revenue streams unrelated to the project. Typically, EMDE governments and state-owned enterprises commit to route foreign currency proceeds from commodity sales through bank accounts controlled by the lender. The cash balances in these accounts can be very large; in low-income, commodity-exporting countries, they average more than 20% of annual PPG debt service to all external creditors.