Kenya is expected to access about KSh51.8 billion ($400 million) in emergency financing from the World Bank to help the country respond to a combination of health, climate and economic risks.
The funding is being arranged through the World Bank’s Rapid Response Option, which allows countries to redirect part of their undisturbed financing when faced with an eligible crisis. The World Bank says the facility can provide access to up to 10 per cent of a country’s undisturbed portfolio.
A source familiar with the matter told Reuters that the money could become available within about six weeks, although the final amount will depend on Kenya’s undisturbed World Bank balance when the financing arrangements are completed.
The request was initially driven by pressure from rising energy prices after the war involving Iran pushed global crude prices higher in February. Kenya has since broadened the request to cover other risks, including the possible effects of El Niño and the Ebola outbreak in the region.
The Ebola threat is linked to outbreaks in the Democratic Republic of Congo and Uganda. The World Bank has already been supporting regional efforts to strengthen disease surveillance, laboratory capacity and cross-border preparedness.
For Kenya, the proposed financing would support preparations for a potential Ebola-related strain on the health system, while helping the country respond to the effects of El Niño on agriculture and water resources.
The funds would also provide some relief to government finances at a time when high energy costs and rising debt repayments are putting pressure on the Treasury.
Kenya and the World Bank are now working to finalise a Contingency Emergency Response Project, which will establish the terms under which the emergency financing can be accessed.
The World Bank has already approved the projects supporting the Rapid Response Option. The money can be released once the required framework is completed.
Kenya’s World Bank portfolio is worth more than $7 billion, according to the Reuters report, although the precise amount available under the emergency mechanism will depend on the portion that remains undisturbed.
The proposed financing comes as the government seeks additional room to respond to emerging shocks while managing increasingly tight public finances.
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