The World Bank Group has approved a Ksh. 161.8 billion (USD 1.25 billion) loan to Kenya to strengthen governance reforms and support development.
In a statement released on Monday, the lender said the package includes a Ksh. 97.1 billion (USD 750 million) Development Policy Operation (DPO) designed to create jobs, attract private investment, and improve livelihoods.
The DPO will be funded through a Ksh. 44 billion (USD 340 million) loan from the International Bank for Reconstruction and Development (IBRD) and a further Ksh. 53 billion (USD 410 million) from the International Development Association (IDA). IBRD provides financial products and policy support to help countries reduce poverty, while IDA offers concessional grants and loans to low-income countries.
The World Bank said the support programme will prioritise stronger governance and efforts to prevent corruption. It expects Kenya to introduce tougher penalties and improved disclosure requirements.
The Bank also confirmed that Kenya will receive an additional Ksh. 64.75 billion (USD 500 million) under a Sustainability Linked Loan (SLL). This will link the DPO’s borrowing costs to green targets, including reducing deforestation and expanding rural energy access.
Backed by a Sustainability Linked Framework under the DPO, the Sustainability Linked Loan (SLL) will give Kenya greater flexibility in how it uses the funds compared with green bonds. It will also tie the loan’s financing costs to performance outcomes.
Under the arrangement, Kenya will pay a lower rate if it meets its green targets, while the cost will rise if it falls short. The World Bank said the DPO form of support reflects Kenya’s acute fiscal and development challenges, including elevated public debt, a wide fiscal deficit, and a high risk of debt distress.
World Bank Division Director for Kenya Qimiao Fan said the programme will also help create a business environment that supports inclusive growth and enables the private sector to generate jobs.
“By supporting reforms to address conflicts of interest, strengthen procurement systems, improve public financial management, and expand social protection, this operation will help Kenya reduce leakage, generate fiscal savings, and ensure that public resources deliver better results and reach the people who need them most,” he said.
Fan’s comments came after Kenya enacted a Conflict-of-Interest law under the Conflict-of-Interest Regulations 2026, which he said is aimed at enhancing accountability and integrity among public officers as they carry out their duties.
The World Bank also insisted that Kenya follow the single Bank account policy for all ministries to reduce idle cash held in separate accounts, limit costly overdrafts, and cut the risk of leakage and misuse of public funds. The programme will rely on Kenya’s Enhanced Single Registry as the main platform for identifying beneficiaries, helping ensure support reaches the poorest households while reducing duplication.
