The government on Tuesday announced that it had secured a multibillion deal with the German Government to finance several development projects within the country, with part of the money being grants and debts.
Treasury Cabinet Secretary John Mbadi revealed that the deals were reached following months of engagement with the German Government to finance key strategic development opportunities within the country.
Speaking after meeting Jochen Flasbarth, German Secretary for Development Cooperation, Mbadi noted that following the talks Kenya entered a debt swap deal with Germany towards an extension of a Ksh9 billion (€60 million) to enhance key rural roads in Kenya.
According to Mbadi, the money will be advanced through the Locally-Led Climate Action Program (FLLoCA) to help Kenyan farmers send their products to markets on time.
Additionally, the money will be spent on the Bogoria-Silali steam field geothermal generating center to improve access to renewable energy for Kenyans.
''A €60 million agreement (Ksh9 billion) over five years was established, with proceeds earmarked for financing the Locally-Led Climate Action Program (FLLoCA), enhancing farmer-market linkages through improved rural roads in Western Kenya, developing the Bogoria-Silali steam field, and implementing the renewable energy enhancement facility and grid stabilization program,’’ National Treasury announced.
Consequently, Germany has committed to give Kenya Ksh13.5 billion towards technical and financial development cooperation for the 2024-2026 period, following a government-to-government negotiation deal.
The allocation will go a long way towards financing the exchange of expertise on financial matters as well as development.
The decision to grant Kenya the amount was reached following the government-to-government negotiations that happened towards the end of last month.
''During the November 2024 biennial talks, Germany committed €90 million for technical and financial development cooperation for the 2024-2026 period,'' the statement from the Treasury revealed.
The German government has also allocated a total of another Ksh9 billion to support Kenya’s reform-oriented budgetary expenses.
Kenya is currently faced with key financial pressures originating from the inability of the country to fund the repayment of its debt obligations.
Additionally, the government has been struggling with setting the necessary mechanisms to constantly hit its revenue targets over the past few years.
