Kenya to receive Ksh.51.8B World Bank emergency funding for El Niño, Ebola response

Kenya is expected to receive about Ksh.51.8 billion in emergency financing from the World Bank after seeking support through the lender’s Rapid Response Option, with the funds aimed at addressing risks from El Niño, an Ebola outbreak in the region, and high energy prices.

The financing, equivalent to about $400 million, is expected to be made available within six weeks, according to a source familiar with the matter cited by Reuters.

A World Bank spokesperson said the lender is supporting Kenya to finalise a framework that will allow it to access rapid financing when an eligible crisis or emergency occurs, including risks linked to the conflict in the Middle East and El Niño.

Kenya applied for the emergency financing after the start of the Iran war in February pushed crude oil prices sharply higher. 

The source said the risks facing the country have since broadened beyond pressure from high energy prices on government finances.

The financing would help mitigate the impact of an Ebola outbreak on the health sector, while supporting efforts to address the effects of El Niño on agriculture and water resources. 

It would also help cushion the wider economy from high energy prices.

Kenya’s World Bank project portfolio exceeds $7 billion (Ksh.906.3 billion), with about $3 billion (Ksh.388.4 billion) already disbursed or committed. 

Under the lender’s emergency financing framework, countries such as Kenya can typically access up to 10 per cent of their undisbursed lending portfolio.

The arrangement would therefore give Kenya access to roughly Ksh.51.8 billion, although the final amount will depend on the country’s undisbursed balance when the financing framework is completed.

Kenya and the World Bank are finalising a Contingency Emergency Response Project that will set out the terms of the financing. 

The World Bank Board has already cleared the projects underpinning the Rapid Response Option, allowing the funds to be released once the document is finalised.

The financing comes as Kenya seeks additional sources of funding amid rising debt repayments, which have squeezed the government’s fiscal space in recent years.