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Home » World Bank Commits $12B Aid to Kenya for Three years

World Bank Commits $12B Aid to Kenya for Three years

On November 20, 2023, the World Bank disclosed its intention to extend a $12 billion support package to Kenya over the following three years.

This financial assistance aims to provide a lifeline to Kenya, addressing the economic hurdles faced by the East African nation.

The bank, in a statement, specified that the overall amount is contingent upon approval from its executive directors and other factors affecting its lending capacity.

The aftermath of the COVID-19 pandemic and recurrent droughts induced by climate change has strained Kenya’s public finances. .

“The World Bank is fully committed to support Kenya in its journey to become an upper-middle-income country by 2030,” the statement read.

The statement further read that the aid is subject to approval by the World Bank Executive Directors. 

Additionally, the approval process and potential impacts on the bank’s lending capacity will determine the $12 billion financial package.

Comprehensive Financial Package

World Bank Country Director Keith Hansen stated that the $12 billion package includes funds from the International Development Association, International Bank for Reconstruction and Development.

The financial support also encompasses money from the International Finance Corporation and the Multilateral Investment Guarantee Agency, in addition to future contributions over three years.

“This will likely include Development Policy Operations as well as new investments in a wide range of sectors such as energy, health, transport and water,” Hansen said.

Kenya has faced acute liquidity challenges caused by uncertainty over its ability to access funding from financial markets before a $2 billion Eurobond matures next June.

Last week, the International Monetary Fund reached a staff-level agreement with Kenya, unlocking immediate access to a $682 million tranche.

This agreement significantly enhances Kenya’s current lending program, providing an additional $938 million and reinforcing the country’s financial stability.

Hansen said in light of recent government announcements and the IMF staff agreement, the World Bank wanted to “make clear the likely magnitude of resources Kenya can count on”.

The World Bank has been one of Kenya’s strongest partners and the largest provider of development finance. 

Kenya is now accessing about $2 billion in concessional financing each year.