The World Bank on Wednesday, August 12, approved a Ksh16.2 billion loan to Kenya.
According to a press release issued by the State Department for Housing and Urban Development, the funds will be used to upgrade urban informal settlements.
This came as a major boost for President Uhuru Kenyatta's Housing Projects under the Big 4 Agenda.
"We are very delighted to receive this support from the World Bank that will go a long way in enabling us to improve informal settlements in our urban spaces and in so doing, spur social and economic development and bring those populations into the mainstream economy," Treasury CS Ukur Yatani stated.
The CS went on to reveal that 1.7 million urban poor are set to benefit from the intervention.
Developments projects to be undertaken will comprise of infrastructure upgrading, strengthening tenure security, enhancing socio-economic inclusion and supporting institutional as well as policy development.
The terms of the credit has a maturity of 30 years including a 5-year grace period.
Benefitting counties will be selected on the basis if their informal settlements.
According to Transport CS James Macharia, the new funding would greatly aid in enabling both the national and county government(s)reduce the number of slums in the country.
"The Project will enhance their quality of life by providing basic services that will ensure that households have access to sanitation and safe water which will in turn reduce communicable diseases. We will provide roads and footpaths that will improve mobility and access to those settlements as well as high mast lighting that will enhance security," he explained.
Over the last few months, the World Bank has approved several loans to Kenya including the largest figure ever (Ksh106.8B) which was approved on May 20.
The huge sum was tagged as necessary to address the Covid-19 Financing Gap and support Kenya’s economy.
A day later, the World Bank Board of Directors approved a Ksh4.3 billion credit for Kenya as part of a larger regional Emergency Locust Response Project to respond to the threat posed by the desert locust outbreak and to strengthen Kenya’s system for preparedness.
On April 2, the international financial institution approved Ksh5 billion in immediate funding to support Kenya’s response to the Covid-19 pandemic.
The money was cited as vital to providing emergency funding for medical diagnostic services, surveillance and response, capacity building, quarantine, isolation and treatment centers, medical waste disposal, risk communications and community engagement as well as for strengthening of the country’s capacity to provide safe blood services.
“This new fast track facility will assist Kenya in its efforts to prevent, detect and respond to the threat posed by COVID-19 and strengthen national systems for public health preparedness,” Carlos Felipe Jaramillo, World Bank Country Director for Kenya stated at the time.
For the financial year that ended in June 2019, Kenya became the third-highest recipient of concessionary loans from the International Development Association (IDA), with loans amounting to Ksh142.3 billion (a 161% increase from the previous financial year).
This figure is set to be surpassed based on the current trend and large inflow of credit to mitigate the harsh economic effects of the Covid-19 pandemic.
IDA is the lending agency at the World Bank.
Kenya’s debt continues to grow by the day, with public debt hitting Ksh6.6 Trillion in May 2020.
Data from a Central Bank of Kenya(CBK) weekly bulletin at the time showed that out of the total debt load, cash borrowed from the domestic market stood at Ksh 3.2 Trillion, with external borrowings at Ksh 3.49 Trillion.
