World Bank lines up new Sh240bn Kenya funding

Signage of the World Bank.  

Photo credit: File photo | pool

The World Bank has lined up Sh240.4 billion ($1.5 billion) in new funding to Kenya before the lapse of the current fiscal year to June.

The Central Bank of Kenya (CBK) disclosed the new funding marked for disbursement between March and April.

“We are also expecting disbursements from the World Bank, around March and April, of around $1.5 billion, according to the National Treasury,” CBK Governor Kamau Thugge said on Wednesday.

The new funding represents extended support from the multilateral lender which has traditionally disbursed between Sh120.2 billion ($750 million) and Sh160.3 billion ($1 billion) a year via its Development Policy Operations facility in recent years.

The new funding is expected to ease jitters on Kenya’s ability to meet the maturity of its debut Sh320.6 billion ($2 billion) in June by ensuring the availability of hard currency.

Disbursements from the facility are expected to complement recent debt inflows from peer lenders including the International Monetary Fund (IMF) and the Trade and Development Bank (TDB).

Besides potentially offsetting the upcoming Eurobond maturity, the hard currency inflows from the disbursement are expected to prop up the country’s foreign currency reserves which is in turn expected to contribute to exchange rate stability.

In November last year, the World Bank signalled the availability of additional budget and project financing to Kenya outlining its commitment over the next three years.

The World Bank has been a key partner for Kenya and emerged as the largest provider of development finance.

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