Kenya is considering its first-ever panda bond as the government seeks additional financing to cover a budget gap and manage debt-servicing obligations. The plan, outlined in the government’s annual borrowing strategy for the fiscal year that began last month, will see Nairobi raise about $300 million from China’s domestic market. Beyond this, Kenya will issue an $815 million Eurobond in the second quarter and borrow over $500 million from Japanese lenders. The government is also considering debt swaps, Sukuk, sustainability-linked and diaspora bonds to diversify financing. Kenya has set its budget deficit at 5.5% of GDP, with about $1.9 billion to come from external financing. The rest will come from domestic debt, the World Bank, the African Development Bank, and Italy. The government also plans to retire at least $500 million in costlier foreign debt to ease repayment pressure.