Kenya’s move to convert Chinese loans from dollars into yuan to cut borrowing costs is drawing interest from at least five other African and Asian nations, an AidData study found, in a sign debt-laden borrowers are exploring alternatives to expensive dollar-linked financing.

Pakistan, Ethiopia, Mozambique, Zambia and Indonesia were among countries that could seek Kenya-style changes to the terms of Chinese loans, according to the report, as Beijing also pushes broader use of the renminbi in cross-border lending.

AidData is a US-based research group at the College of William & Mary that analyses global development finance, including Chinese lending.

The East African nation converted three Chinese railway loans from dollars into yuan, alongside longer maturities and extra grace periods, cutting its debt-service costs by about $215 million a year.

“Kenya’s widely publicised payment relief from China Eximbank has sparked interest among other countries in converting their existing debts from USD to RMB,” said AidData, which also analysed media reports for its study.

The US dollar remains the dominant currency for bilateral lending to developing economies.

However, Kenya’s move is also being seen as part of a strategic shift in China Eximbank’s broader portfolio of cross-border loans as it works to accelerate the internationalisation of RMB, the report said.

China Eximbank is now encouraging — and in some cases requiring — sovereigns to borrow in yuan rather than dollars, the report said, citing recent examples from Sri Lanka and Bangladesh.

China Eximbank and finance ministry officials did not immediately respond to requests for comment.

Ethiopia, which also borrowed money from Beijing to build a railway and is at the tail end of restructuring its external debt, was a top candidate for benefiting from a similar move, the report found.

“Ethiopia’s interest in RMB debt conversion is best understood as part of a broader debt distress episode,” the report’s authors said.

Converting US dollar debt to renminbi tied to China’s Loan Prime Rate could reduce borrowing costs if the new benchmark is meaningfully lower than the existing arrangement linked to US dollar short-term funding rate SOFR, the report said.