The government is seeking new financing from the African Development Bank (AfDB) for various projects, deepening its borrowing from the multilateral lender.
AfDB officials met with National Treasury officials on Monday when the request for the additional funding was made, according to sources.
National Treasury Principal Secretary Chris Kiptoo meanwhile said AfDB has cumulatively disbursed $509 million (Sh65.6 billion) loans to Kenya to fund various projects including in power transmission.
Dr Kiptoo announced the meeting with AfDB officials on his X social media account. The multilateral development bank is one of the major financiers of the Kenyan government.
“The African Development Bank has extended financing amounting to USD 509 million in support of Kenya’s development priorities, reinforcing our partnership under the current Country Strategy framework,” Dr Kiptoo wrote.
“Today at the National Treasury, I held discussions with Mr Alex Mubiru, Director-General for the Regional Development and Business Delivery Office for East Africa at the African Development Bank, at the start of the joint technical mission for the mid-term review of the Country Strategy Paper covering the period 2024 to 2028.”
He added that the discussions covered key flagship interventions, including investments in the health sector, water and road infrastructure, transmission networks, and the need to fast track projects through regular portfolio reviews to enhance absorption and impact.
AfDB’s commitment to Kenya has been growing over the years, reaching the equivalent approval of $606.2 million (Sh78.2 billion in 2024.
Among the projects that AfDB has partially funded is the Ethiopia-Kenya electricity highway. The project links Ethiopia’s hydroelectric power and Kenya’s geothermal and wind energy in a 1,068 kilometre network, allowing power exchange between the two countries.
Kenya has had a substantial deficit in electricity production, a move that has seen it rely on power imports from Uganda and Ethiopia to bridge the gap.
Besides AfDB, Kenya has ramped up its borrowings from other sources including the domestic and the international debt market while also stepping up sales of State-owned enterprises.
The country recently raised $2.25 billion (Sh290.3 billion) in a new Eurobond issuance whose proceeds will go towards refinancing existing loans worth $500 million (Sh64.5 billion) and contributing to the government’s external borrowing target for the current fiscal year.
The government will now hold a surplus of $1.75 billion (Sh225.8 billion) from the new Eurobond after settling the latest buyback, although it has not given concrete details of what it will do with the cash.
The Treasury has also raised its target for domestic borrowing in the current fiscal year to Sh885.9 billion from the previous Sh613.5 billion.
The government has leaned heavily on borrowing after its previous strategy of aggressively raising taxes was met with major street protests.
The Treasury is also on course to raise hundreds of billions of shillings from the sale of its stakes in Safaricom, Kenya Pipeline Company and others.
