(Bloomberg) -- Kenya’s loan payments to the Export-Import Bank of China “is a key driver of debt servicing expenditures” accounting for a quarter of total external loan repayments, according to a lawmakers report.

The East African nation will pay China 147.9 billion shillings ($1.2 billion) in interest and principal payments in the fiscal year through June 2025, according to the National Assembly’s public debt & privatization committee.

External debt payments are projected at 590.6 billion shillings in the financial year beginning July 1, adding up to about a third of total debt servicing seen at 1.85 trillion shillings, according to the lawmakers report.

“It is imperative to implement measures to curtail these expenditures and create fiscal space for development,” the lawmakers said.

Commercial borrowings including Eurobonds and syndicated loans will consume 35% of Kenya’s foreign debt payments, it said.

Kenya is at high risk of debt distress and in 2021 signed onto an International Monetary Fund program to help reduce debt vulnerability.

Payments to multilateral lenders in the coming year include 84.5 billion shillings to the World Bank, 83.9 billion shillings to the African Development Bank and 14.8 billion shillings International Monetary Fund, the report said.

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