Kenya is expected to receive up to Ksh51.8 billion in emergency financing from the World Bank to help the country respond to potential crises, including El Niño, an Ebola outbreak in the region and high energy prices.
The funding, estimated at about USD400 million, will be accessed through the World Bank’s Rapid Response Option, according to a source familiar with the matter cited by Reuters.
The money is expected to be made available within six weeks once Kenya completes the required arrangements with the lender.
A World Bank spokesperson said the institution was working with Kenya to finalise a framework that would allow the country to quickly access financing when an eligible emergency occurs.
The framework will cover risks linked to events such as El Niño and the effects of the conflict in the Middle East.
Funds to Support Health and Agriculture
The proposed financing comes as Kenya prepares for possible disruptions to key sectors of the economy.
Part of the funds would help the country deal with the effects of an Ebola outbreak in the region, particularly on the health sector.
The money would also support measures to respond to the effects of El Niño on agriculture and water resources, while helping cushion the economy against high energy prices.
Kenya initially sought the emergency financing after the war involving Iran began in February and pushed global crude oil prices higher.
The increase in energy costs placed additional pressure on government finances at a time when Kenya is already dealing with limited fiscal space.
Kenya’s World Bank Portfolio
Kenya currently has a World Bank project portfolio worth more than USD7 billion, equivalent to about Ksh906.3 billion.
Around USD3 billion, or approximately Ksh388.4 billion, has already been disbursed or committed.
Under the World Bank’s emergency financing arrangements, countries can typically access up to 10 per cent of their undisbursed lending portfolio when a qualifying crisis occurs.
This would give Kenya access to about Ksh51.8 billion, although the final amount will depend on the country’s undisbursed balance when the financing framework is completed.
Kenya and the World Bank are now working to finalise a Contingency Emergency Response Project, which will set out how the emergency financing will be accessed and used.
The World Bank Board has already approved the projects supporting the Rapid Response Option, paving the way for the funds to be released once the remaining framework is completed.
The expected financing comes as the government looks for additional funding amid growing debt repayment obligations, which have continued to put pressure on Kenya’s finances.
