KDC to get Sh500m World Bank grant for lending

KDC director-general Norah Ratemo.

Photo credit: File | Nation Media Group

The Kenya Development Corporation (KDC) has raised a grant of Sh500 million from the World Bank to bolster its lending to firms managing climate-related shocks.

KDC director-general Norah Ratemo said the company will receive the grant by the close of this financial year.

“We shall be getting Sh500 million from the World Bank for climate shocks before the end of the financial year,” said Ms Ratemo yesterday during the 2024 Association of African Development Finance Institutions (AADFI) Annual General Assembly in Nairobi.

The Abidjan-based institution is an umbrella body of 85 small, medium and large DFIs from more than 46 countries.

KDC is one of three DFIs in Kenya that are members of the continental lobby group, which helps its member institutions to raise capital from across the globe.

The other two are the Agricultural Finance Corporation (AFC), which provides low-cost loans to farmers, and the Kenya Industrial Estates (KIE) that provides industrial infrastructure, financial products and business development services.

“We are looking to raise $240 million (Sh31.8 billion) for our Green Fund which already has seed capital of $40 million (Sh5.3 billion). We are mobilising funds from new investors, development finance institutions (DFIs) and other partners to invest in the fund,” added Ms Ratemo.

KDC is a State-owned development finance institution which was established in November 2020 by merging the operations of Industrial and Commercial Development Corporation (ICDC), Tourism Finance Corporation (TFC) and IDB Capital Limited.

The corporation, which lends to large institutions, disbursed Sh1.14 billion low-cost loans last year, even as it seeks to raise Sh10 billion from both government and non-government sources in the financial year starting July. KDC lent Sh357 million or 31.3 percent of the total disbursement to manufacturers while Sh205 million was lent to firms dealing in post-harvest loss management.

Other top recipients of the parastatal’s funding were firms in the tourism sector, which were loaned Sh213 million while the blue economy sector got Sh98 million.Wholesale and retail firms got Sh13 million while energy firms got Sh15 million at a time construction firms were loaned to the tune of Sh37 million.

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