Kenya Set to Receive $12 Billion Support from World Bank Over Three Years

Kenya Set to Receive $12 Billion Support from World Bank Over Three Years

By Staff Writer, 22 November 2023

On Monday (20/11), the World Bank announced its plan to provide $12 billion in support to Kenya over the next three years, potentially offering a substantial boost to the East African nation's financially challenged economy.

The international financial institution clarified in a statement that the proposed amount is contingent upon approval from its executive directors and various factors that could impact its lending capacity.

Kenya has been grappling with financial strain due to the lingering effects of the COVID-19 pandemic and recurrent droughts attributed to climate change.

Expressing commitment, the World Bank stated, "The World Bank is fully committed to supporting Kenya in its journey to become an upper-middle-income country by 2030."

The statement further explained, "Subject to the World Bank Executive Directors' approval of new operations, and factors that may affect the bank's lending capacity, this implies a total financial package of $12 billion over the three years."

World Bank Country Director Keith Hansen outlined that the $12 billion comprises funds currently available to Kenya from the International Development Association, the International Bank for Reconstruction and Development, the International Finance Corporation, and the Multilateral Investment Guarantee Agency.

Additionally, it includes what the World Bank anticipates providing in the upcoming three years.

Hansen elaborated on the allocation, stating, "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."

Kenya has been facing acute liquidity challenges, driven by uncertainty regarding its access to financial markets before a $2 billion Eurobond matures next June.

Notably, the International Monetary Fund (IMF) recently reached a staff-level agreement with Kenya, unlocking immediate access to an additional $682 million tranche of funding and augmenting its existing lending program by $938 million.

Hansen, in response to recent government announcements and the IMF staff agreement, emphasized that the World Bank aims to "make clear the likely magnitude of resources Kenya can count on."

Reporting by George Obulutsa and Elias Biryabarema; Editing by Alexander Winning and Alex Richardson (Reuters)

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