Kenya secures another loan, set to receive Sh85 billion

The loan has an annual interest of 3 percent

WASHINGTON - MAY 08: The World Bank headquarters is shown May 8, 2007 in Washington, DC. Recent reports indicate that the global financial institution may soon resolve controversies surrounding its President Paul Wolfowitz. (Photo by Win McNamee/Getty Images)

The World Bank will give Kenya Sh85 billion ($750 million) to support economic transformation post-pandemic.

Speaking on Thursday, World Bank Country Director for Kenya Keith Hansen outlined that the body is negotiating with the Kenyan government on the new loan which will be channeled to the infrastructure sector.

The financing will “help accelerate Kenya’s ongoing inclusive and resilient recovery,” the lender said in a statement on its website.

The funding is part of the Development Policy Operation (DPO) loan series, through which the World Bank provides low-cost budget financing along with support to key policy and institutional reforms.

DPOs are used by the World Bank to support a client country’s ambitious policy and institutional reform agenda to help to accelerate inclusive growth and poverty reduction.

“The World Bank, through the DPO instrument, is pleased to support these efforts which are positioning Kenya to sustain its strong economic growth performance and steering it towards inclusive and green development,” said Hansen.

The DPO also supports Kenya’s capacity to handle future pandemics through the establishment of the Kenya National Public Health Institute (NPHI).

“The government’s reforms supported by the DPO help reduce fiscal pressures by making public spending more efficient and transparent, and by reducing the fiscal costs and risks,” said Alex Sienaert, Senior Economist for the World Bank in Kenya.

The loan, which comes with an annual interest rate of about 3.0%, is the second part of a credit facility initiated in 2020, the World Bank said. The first segment was disbursed last June.

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