Kenya Secures Ksh 8.9 Billion OPEC Fund Deal to Finance 6 Key Development Projects
The Government of Kenya, through the National Treasury, has secured a Ksh8.9 billion (€60 million) concessional loan from the OPEC Fund for International Development, an intergovernmental development finance institution that provides support to developing countries.
This funding is intended to bolster the country’s ongoing efforts in economic reform, sustainable development, and climate resilience.
The loan agreement was officially signed on Tuesday, April 22, by the President of the OPEC Fund, Mr. Abdulhamid Alkhalifa, and Kenya’s Cabinet Secretary for the National Treasury and Economic Planning, Mr. John Mbadi.
The signing took place during CS Mbadi’s working visit to the United States, where he engaged with various international financial institutions and development partners.
In a statement issued by the National Treasury, the government announced that the funds will be allocated to the Economic Transformation and Green Recovery Support Programmes (ETGRSP).
These programmes are a central component of the government’s broader strategy to achieve sustainable economic growth while addressing the impacts of climate change and enhancing institutional governance.
Cabinet Secretary Mbadi noted that the loan, which is policy-based in nature, will directly support the implementation of key government initiatives.
One of the primary projects to benefit from this funding is the establishment of the Kenyatta National Hospital (KNH) Burns and Paediatrics Centre, a specialized medical facility aimed at improving healthcare delivery, particularly for vulnerable populations such as children and burn victims.
In addition to healthcare infrastructure, the funding will also be channelled toward energy and agricultural development. Key initiatives include rural electrification in five underserved regions, the rehabilitation of the Bura Irrigation Scheme in Tana River County, the expansion of electricity access under the Kenya Electricity Expansion Project, and the construction of the Urban Roads Phase 1 Project in Wajir County.
These investments are expected to accelerate rural development, stimulate local economies, and enhance access to basic services.
Speaking at the signing ceremony, OPEC Fund President Mr. Alkhalifa underscored the strategic significance of the loan in supporting Kenya’s development agenda.
He emphasized that the programme would contribute to strengthening institutional governance, promoting low-carbon economic growth, and creating meaningful employment opportunities, particularly for youth and women.
“The programme will foster private sector development in digital and climate-smart sectors, support reforms in e-mobility, carbon markets, and green jobs, and ultimately contribute to sustainable service delivery and good governance,” Mr. Alkhalifa stated.
He further confirmed that the projects supported by the loan will be co-financed by the African Development Bank (AfDB), in alignment with Kenya’s Bottom-Up Economic Transformation Agenda. This collaboration aims to ensure synergy and maximize the developmental impact of the funded initiatives.
The announcement comes shortly after the government revealed that it had secured an additional Ksh77 billion in short-term financing from commercial banks. That funding is earmarked for the construction and rehabilitation of critical road infrastructure across the country. According to CS Mbadi, the new financing package will supplement the Fuel Levy Fund and enable the government to fast-track road development projects that have been hindered by budgetary constraints.
In recent years, Kenya has faced significant fiscal pressure as revenue growth has slowed amid rising expenditure demands, particularly within the devolved units. The strain on public finances has been exacerbated by high debt servicing obligations and the increasing need to finance essential infrastructure and social development projects.
In response, the government has sought to diversify its sources of financing by engaging bilateral and multilateral lenders, as well as tapping into commercial markets. President William Ruto has also initiated discussions with the Government of China to explore additional financing opportunities for other strategic infrastructure projects.
As Kenya continues to pursue its economic transformation agenda, partnerships with institutions such as the OPEC Fund and the AfDB will play a critical role in ensuring the country maintains fiscal stability while advancing its development goals.
The government’s commitment to green growth, inclusive development, and institutional reform remains central to its long-term vision of achieving a resilient and prosperous nation.
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Kenya Secures Ksh 8.9 Billion OPEC Fund Deal to Finance 6 Key Development Projects
