National Treasury Cabinet Secretary Prof Njuguna Ndung’u has revealed that the country has requested the World Bank for a $750 million (Sh92.1 billion) concessional loan budget support.
Speaking during the launch of the 2023 – 2028 Country Partnership Framework between the government and World Bank yesterday, the CS said that the loan is expected to help the government with funding needs for the current financial year.
“This will also promote human capital development as a major input to economic growth,” Ndung’u observed.
Last month Ndung’u had alluded that the country was in undisclosed talks with the World Bank for new financing.
In accordance with the Development Policy Operation (DPO) framework of the World Bank, the country will receive its fifth loan, totaling $3.25 billion (or Sh399 billion at the current currency rate).
The Sh280.7 billion ($2.3 billion) set up for external borrowing during the current fiscal year will include the loan.
Prof. Ndung’u further mentioned that the World Bank held firm at Sh92 billion ($750 million) despite the government negotiating for a Sh126 billion ($1 billion) finance package.
The country last got DPO financing on June 10 of last year, when the World Bank authorised Sh92 billion at a 3.1 percent annual total interest and service cost.
A debt-fueled infrastructure construction drive by the previous administration burdened the nation with high-interest commercial debt, hence the move for President William Ruto to look for less expensive loans.
The lending instrument under discussion with the World Bank is a Development Policy Operations loan, which is typically tied to a pre-agreed policy area.
The DPO is a framework whereby the World Bank supports a member country’s institutional
