Govt Eyes Ksh122 Billion in Loans & Grants from World Bank, AfDB by Mid-Year – CS Mbadi

Kenya is expecting to receive Ksh122 billion in fresh loans from external sources, Treasury Cabinet Secretary John Mbadi has said.

While speaking to Reuters, Mbadi revealed Kenya will hold the $1.5 billion about Ksh193 billion privately placed bond in the United Arab Emirates to fit into the budget plans for this financial year. 

The UAE loan is to be dispatched in one tranche, according to reporting from Bloomberg, and was expected to be released this week. 

However, Mbadi now says the country has placed the loan on hold to assess the budgetary gaps. This comes as the Supplementary Budget II makes its way through the National Assembly.

President William Ruto visits a construction site in February 2025.

PCS

“We are still holding out to see exactly how much budget gap we will still have from the external finances before we draw the (UAE) money,” said Mbadi.

According to Mbadi, the decision is to allow the government to fit the loan into the country’s fiscal framework. “The reason why we have not done it is that we have to do it within our fiscal framework,” Mbadi told the publication on Friday.

The loan is to be used to cater to some of the maturing debts and support of the budget, according to Mbadi.

“We can use it partly for liability management, partly for budgetary support, or exclusively for budgetary support,” he said.

Mbadi mentioned that the lending agreement from the UAE, finalised last year, carries an interest rate of 8.25 per cent. The repayment will occur in three installments of $500 million (about Ksh89.95 billion in the current exchange rates) each, due in the years 2032, 2034, and 2036.

Mbadi announced that Kenya anticipates receiving over $950 million (about Ksh122 billion in the current exchange rates) in loans and funding from various international sources by the end of June. 

The money includes contributions from the World Bank and the African Development Bank, as well as support from Italy and Germany.

Last year, Kenya secured a $200 million (about Ksh25.7 billion) loan from the African Development Bank and was in talks with the World Bank for a new $750 million (about Ksh96.4 billion) loan.

As for the latter, it remains unclear whether Kenya and the World Bank have reached an agreement, but the government seems confident of receiving the funds.

Treasury Cabinet John Mbadi during a past media engagement at Treasury Buildings in Nairobi.

Treasury

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