The World Bank has approved $1.25 billion in financing for Kenya, combining budgetary support and sustainability-linked financing, the institution announced on Tuesday, June 30.
The package includes a Development Policy Operation (DPO) of $750 million, with $340 million through the International Bank for Reconstruction and Development (IBRD) and $410 million through the International Development Association (IDA). This is the seventh DPO granted to Kenya since 2018. A $500 million sustainability-linked facility, in the form of a syndicated loan backed by a credit enhancement, completes the operation.
This new support comes as Kenya faces high levels of debt and a significant budget deficit, limiting its ability to finance itself solely on domestic markets at a high cost. The country continues to rely on multilateral institutions to cover part of its budgetary needs.
The program is part of a series of similar operations since 2018, reflecting a structural dependence on concessional and semi-concessional financing to support budgetary reforms and debt refinancing.
The World Bank indicated that the operation follows the implementation of prior reforms in governance, social protection, and public financial management, in a context of budget consolidation and political constraints related to the upcoming electoral cycle.
