Politics and policy
World Bank set to raise funding for Kenya enterprises
Posted Sunday, August 12 2012 at 16:44
The International Finance Corporation (IFC) will raise lending to enterprises in Kenya by at least 10 per cent this year, targeting investments in energy, transport and information technology.
The World Bank’s private sector lending arm plans to provide at least Sh33.6 billion in a bid to attract investment, create jobs and stimulate growth.
In the last fiscal period ended June 30, the multilateral lender invested Sh30.2 billion in Kenya with special focus on infrastructure and natural resource projects.
“Kenya is an exciting economy that has served as an example to East Africa as a whole. IFC is demonstrating what can be done here and we will keep looking for opportunities to do more,” said Mr Jean Philippe Prosper, the global lender’s director for East and Southern Africa.
Kenya accounted for nine per cent of the total Sh336 billion that the IFC invested in 33 sub-Sahara African countries last year, a mark of confidence in the country’s private businesses potential.
The Bretton Woods agency’s credit facilities and equity investments in Kenya has grown six-fold in the last two years from Sh5.04 billion in 2010 to Sh30.2 billion last year.
The World Bank projects that the Kenyan economy will grow by five per cent this year due to a robust service sector and increased trade within the EAC bloc.
Last week, the lender committed to provide Kenya Power with a Sh16.8 billion loan to reinforce the electricity retailer’s grid in the Nairobi metropolis meant to increase access, cut incidents of power outages, and eliminate technical losses.
“Power projects are by nature capital intensive, and the IFC loan therefore brings in much needed financial support in efforts to extend the national grid, improve quality of power supply, and stabilise voltages to cope with additional demand,” said Mr Joseph Njoroge, the managing director of the power utility firm.
In 2009, IFC advanced loans to two fossil-fired power plants— Gulf Power, Sh2.3 billion and Thika Power Sh3.2 billion to produce 80 and 87 megawatts respectively of the costly electricity as a stopgap solution.
“Access to electricity will improve working conditions for business, and increase living standards of Kenyans,” said Mr Prosper.
The African Development Bank (AfDB) estimates that the continent’s annual demand for infrastructure funding is about Sh7.8 trillion ($93 billion) and growing, and is planning Africa’s first ever infrastructure bond to raise about 1.8 trillion ($22 billion).