Kenya and Iran have signed protocol agreements providing frameworks for enhanced bilateral cooperation between the two countries.
The agreements on Veterinary and Animal Health and Protocol of Cooperation were signed in Nairobi on Tuesday night by the Ministers for livestock development and foreign affairs and witnessed by Kenyan President Mwai Kibaki and Iranian leader Mahmoud Ahmadenijad.
The agreement on protocol cooperation provided for a five million U.S. dollars credit facility which Iran is extending to Kenya and whose details would later be worked out by the relevant ministries.
During bilateral talks chaired by President Kibaki, the two leaders noted that the ties between the two countries were founded on a common vision for development and prosperity of the people with trade and investment playing a key role in realizing the objective.
A statement from President Kibaki's office said he noted with appreciation that the five sessions of Kenya/Iran joint commission of cooperation, the last of which was held in Nairobi last year, had facilitated an increase in trade between the two countries.
The Iranian president arrived in Nairobi from Djibouti, leading a delegation of more than 100 officials and private businessmen.
Ahmadinejad is the first Iranian Head of State to visit Kenya since 1996. Iranian officials say expanding political and economic ties with east Africa's largest economy is a priority for the president.
Iran exports industrial oil, chemicals and carpets to Kenya and Kenya considers Iran a key market for its tea.
But several bilateral agreements are expected to be signed, which officials say could see Iran's volume of trade with Kenya rise to 500 million U.S. dollars by the end of next year.
Iran says it will remove some of the bureaucracy that used to delay tea shipments and other goods into the country. Kenyan officials are expected to add beef and fish products on the list of exports to Iran.
The two governments have also reportedly agreed to establish direct air links between Nairobi and Tehran, set up a shipping line between the Iranian port of Bandar Abbas and the Kenyan port of Mombasa, and to build an Iranian trade center in Nairobi.
During the Tuesday meeting, President Kibaki said the volume of trade between Kenya and Iran currently stood at 7 billion shillings (88.6 million U.S. dollars) and stressed the need for the business communities in the two countries to take advantage of the wider markets in the East African Community (EAC) and the Common Market for East and Southern Africa (COMESA) to exploit the potential through joint ventures.
"There is however need to address the imbalance that currently characterizes trade relationships of the two Countries," President Kibaki said, adding that Kenya looks forward to increasing her meat products, coffee, tea, fruits and vegetables exports to Iran.
He regretted that the on-going global financial and food crisis coupled with drought caused by unpredictable rainfall had adversely affected Kenya's economy and posed serious challenges which could only be tackled through multilateral cooperation.
As a developing country, Kibaki however noted, Kenya counts on the support of her development partners to assist in meeting infrastructure and socio-economic needs.
The president reiterated the government's desire and commitment to continue working closely with Iran in the spirit of South-South cooperation to promote multilateralism.
Local media reports have also raised the possibility that Iran may be poised to sign a deal to help Kenya build a nuclear power plant to generate electricity.
An Iranian company has already been hired by the Kenyan government to construct a hydroelectric power plant north of Nairobi and a gas power plant near Mombasa.
Iran's nuclear ambition has long been a source of alarm for the West and Israel. They have repeatedly accused Iran of using its nuclear facility, not to produce electricity but to produce the plutonium needed to build nuclear weapons.
Kenya is one of Washington's top allies on the continent but Foreign Affairs Minister Moses Wetangula has dismissed any suggestion that Ahmadinejad's visit could harm local ties with Washington.
"If any such reservations have been made, they are misplaced because our friendship with country A is not to the exclusion of country B. Every relationship has its unique factors and qualities; our relationship with Iran is commercial," Wetangula had said on Sunday.
He said that Kenya did not object to Iran's nuclear program so long as it had peaceful objectives. "We don't believe that any country in the world, with no exception, should possess nuclear weapons because they are unhelpful to advancing the course of humanity," he said.
U.S. President Barack Obama has indicated that he is willing to open a dialogue with Tehran and Iranian President Mahmoud Ahmadinejad has also signaled a willingness to engage in talks.
But President Obama says Iran must first abandon its nuclear program before steps can be taken to improve diplomatic relations.