World Bank stalls Kenya loan

Kenya’s Sh96.9 billion World Bank loan is still on hold as the government tries to clear three policy conditions before June 30. (businessdailyafrica.com) The money is a Development Policy Operations loan, a form of World Bank budget support that goes straight to the Treasury once agreed reforms are in place. Kenya cannot renegotiate those conditions under the facility. (businessdailyafrica.com) The three remaining hurdles are specific. Kenya must publish rules for who qualifies for cash transfers, adopt regulations for sustainability-linked bonds, and amend forest law to back a target of 30% national tree cover by 2032. (businessdailyafrica.com) (thesharpdaily.com) The social-protection rules cover stipends for orphans, older people, and people with disabilities. The bond rules would govern debt whose cost can rise if Kenya misses agreed climate or social targets. (msn.com) (julisha.co.ke) The timing is tight because Kenya wants the loan released before the fiscal year closes on June 30. Business Daily reported the freeze comes as officials also seek extra World Bank help tied to the economic shock from the Iran war. (businessdailyafrica.com) (usnews.com) Central Bank Governor Kamau Thugge said on April 16 that Kenya had requested rapid World Bank financial support to manage those shocks. He did not give an amount, but said the request was separate from the budget-support talks. (usnews.com) Reuters reported that Kenya, like other heavy fuel importers, was trying to avoid shortages and contain price increases that could push inflation higher. Thugge said foreign-exchange reserves were above $13 billion, equal to about 5.8 months of import cover. (usnews.com) (thekenyatimes.com) The growth backdrop has also worsened. The World Bank cut Kenya’s 2026 growth forecast to 4.4%, citing high debt service, global pressures, and regional conflict. (thekenyatimes.com) Kenya has been working on sustainability-linked borrowing for more than a year with World Bank support. Bloomberg reported in 2024 that Nairobi was preparing a $500 million bond that would tie borrowing costs to measurable sustainability targets. (bloomberg.com) So the dispute is not over whether Kenya wants the money. It is over whether Nairobi can finish the legal and regulatory work fast enough for the World Bank to disburse it before the budget deadline. (businessdailyafrica.com)