The government, through the National Treasury, has secured a Ksh8.9 billion (€60 million) loan from the OPEC Fund for International Development, an intergovernmental development finance institution.
The multi-billion shilling loan agreement was signed on Tuesday, April 22, between OPEC Fund President Abdulhamid Alkhalifa and Kenya's Treasury Cabinet Secretary John Mbadi during the latter's visit to the United States.
While announcing the acquisition of the loan, the Ministry of Treasury revealed that the proceeds would be used for the Economic Transformation and Green Recovery Support Programmes (ETGRSP).
According to CS John Mbadi, the policy-based loan would also support the implementation of critical government projects, including the establishment of the Kenyatta National Hospital (KNH) Burns and Paediatrics Centre.
Other projects set to be supported by the loan facility include rural electrification in five regions, the rehabilitation of the Bura Irrigation Scheme, the Kenya Electricity Expansion, and the construction of the Urban Roads Phase 1 Project in Wajir.
Speaking moments after signing the loan deal, the OPEC President said the loan would strengthen Kenya's governance, boost climate resilience, and create jobs for youth and women.
"The program will promote low-carbon growth, foster private sector development in digital and climate-smart sectors, and support reforms in e-mobility, carbon markets, and green jobs, contributing to sustainable service delivery and good governance," said Alkhalifa.
He further noted that the aforementioned projects would be co-financed alongside the African Development Bank (AfDB), adding that it aligned with Kenya's Bottom-Up Economic model.
The latest announcement comes barely a week after Kenya secured another loan worth Ksh77 billion to fund the construction and rehabilitation of roads across the country.
The acquisition of the short-term financing from commercial banks was confirmed by CS Mbadi, who noted that the loan amount would be used in road construction alongside proceeds from the Fuel Levy Fund.
Kenya has, in recent years, been struggling to fund key infrastructure projects due to slower revenue growth, which has forced the government to seek alternative modes of financing.
High debt repayments and increased expenditure, particularly in the 47 counties, have also escalated the funding problem. Meanwhile, President William Ruto has now turned to China to secure more funds for other critical state projects.
