World Bank expands Kenya loan kitty by Sh32.3 billion

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The World Bank Group has increased Kenya’s loan kitty by Sh32.3 billion ($250 million) bringing the expected disbursement from its Development Policy Operations (DPO) facility to Sh129 billion ($1 billion).

The extra disbursement is expected to provide additional resources to Kenya which will in part plug the budget deficit in the 2022/23 fiscal year to June.

“The program development objective is to enhance sustainable, inclusive and green growth by creating fiscal space in a sustainable manner, increasing competitiveness to boost exports in agriculture and improving governance to facilitate inclusive private sector-led development,” the World Bank noted in a disclosure updating the terms on March 2, 2023.

At the end of last year, Treasury Cabinet Secretary Njuguna Ndung’u expected the facility which at the time had Sh96.8 billion ($750 million) as the commitment amount to help bolster Kenya’s access to cheap financing in line with the new administration’s goal of tapping mostly from concessional funding sources in external financing.

World Bank’s Development Policy Operations financing provides rapidly-disbursing financing to help countries address actual or anticipated development financing requirements.

The World Bank loan is expected to get approvals late in the financial year with the published multilateral lender’s board calendar showing no planned meetings with Kenya over the facility through the next three months to the end of May.

Under the current financial year, the National Treasury has projected net foreign financing at Sh395.8 billion including Sh110 billion in commercial financing which covers the proposed syndicated loan.