NAIROBI, June 30 – The World Bank has approved a $750 million budget support package for Kenya alongside a new sustainability-linked financing facility designed to strengthen the country’s public finances, lower borrowing costs and accelerate economic reforms.
In a statement issued on Tuesday, the World Bank said the budget support will be provided through a Development Policy Operation (DPO), marking the seventh such operation approved for Kenya since the country received its first DPO in 2018.
The financing package comprises a US$340 million loan from the International Bank for Reconstruction and Development (IBRD) and US$410 million in highly concessional funding from the International Development Association (IDA).
The latest support comes as Kenya continues to manage mounting fiscal pressures driven by elevated public debt levels and persistent budget deficits, prompting the government to pursue reforms aimed at strengthening macroeconomic stability and improving public financial management.
In addition to the budget support, the World Bank announced a sustainability-linked syndicated loan facility targeting approximately US$500 million. The facility will be backed by a credit enhancement mechanism designed to reduce investor risk and lower Kenya’s borrowing costs.
According to the World Bank, the sustainability-linked loan is intended to diversify Kenya’s sources of financing while supporting key environmental and development objectives, including reducing deforestation and expanding access to electricity in rural communities.
The financing package reflects the World Bank’s continued support for Kenya’s reform agenda at a time when the government is seeking more affordable sources of funding to reduce its dependence on high-cost domestic borrowing and strengthen long-term debt sustainability.
The combined facilities are expected to improve Kenya’s financing flexibility while supporting broader economic reforms, climate resilience and inclusive development, reinforcing the country’s efforts to maintain fiscal stability amid a challenging global economic environment.
