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Economy

AfDB Kenya projects funding jumps to Sh48 billion

AfDB typically lends to governments and private
AfDB typically lends to governments and private companies, mostly to fund infrastructure projects such as roads and energy. FILE PHOTO | NMG 

The African Development Bank (AfDB) raised its funding approvals for Kenya projects by 37.7 percent last year to Sh48.2 billion, according to disclosures in the institution's latest annual report.

The lender, in which Kenya has a 1.44 percent stake, had committed a total of Sh35 billion for Kenya in 2017.

AfDB typically lends to governments and private companies, mostly to fund infrastructure projects such as roads and energy. It also makes equity investments in some projects.

AfDB invests from its units of accounts (UA) --a basket of currencies including US dollars and euros.

The lender is funding several projects in Kenya including a 35 megawatt power plant in Menengai and the newly created Kenya Mortgage Refinance Company (KMRC).

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It recently announced a loan of 90 million euros (Sh10.3 billion) to help fund KMRC, a public-private company that will provide long- term funding to banks and saccos to enable the institutions to expand their mortgage loans.

Creation of KMRC is part of the government’s ambition to deliver 500,000 houses in major towns across the country over the next four years.

Besides the capital provided by its shareholders, KMRC will also issue bonds to expand the pool of funds available.

The Menengai power project has signed a 25-year take-or-pay power purchase agreement with the national power utility, Kenya Power.

It also signed a project implementation and steam supply agreement with the state-owned Geothermal Development Company.

The plant will increase installed capacity while addressing growing demand for reliable and affordable electricity.

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