Kenya has secured a cumulative $1.25 billion (Sh161.86 billion) financing package from the World Bank.
The funding is poised to support reforms aimed at strengthening governance, improving public finance management and expanding social protection for vulnerable households.
Generally, the move is expected to enhance fiscal sustainability and improve the country's investment climate.
It includes a $750 million (Sh97.12 billion) Development Policy Operation (DPO) and an additional $500 million (Sh64.74 billion) Sustainability Linked Loan.
The DPO comprises a $340 million (Sh44.08 billion) loan from the International Bank for Reconstruction and Development (IBRD) and $410 million (Sh53.14 billion) in highly concessional financing from the International Development Association (IDA), including support for refugees and host communities.
The approval comes less than two weeks after President William Ruto met World Bank President Ajay Banga and follows another external financing boost through the recently secured JP¥25 billion (Sh22 billion) Samurai Loan.
Ideally, the latest package is expected to strengthen Kenya's foreign exchange reserves, currently standing at $13.24 billion, equivalent to about 5.6 months of import cover, while easing budgetary pressures.
The World Bank said the operation backs Kenya's ongoing reform agenda aimed at making public resources more transparent, efficient and equitable while tackling corruption.
A key milestone under the programme is the enactment of the Conflict-of-Interest law and the gazetting of the Conflict-of-Interest Regulations 2026.
The law establishes stricter disclosure requirements and penalties for public officials found abusing their positions for private gain.
The programme also supports reforms to modernise public financial management.
Notably, the government has directed all Ministries, Departments and Agencies to operate through the Treasury Single Account, a move expected to improve oversight of public funds, reduce idle cash balances and minimise costly borrowing.
In addition, Kenya is advancing electronic government procurement systems to increase transparency, strengthen competition among suppliers and make public contracting easier to monitor.
The financing further seeks to strengthen the country's social protection system through the implementation of the Social Protection (General) Regulations 2026.
The reforms support the use of Kenya's Enhanced Single Registry as the primary platform for identifying beneficiaries, helping ensure assistance reaches the poorest households while reducing duplication in welfare programmes.
“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,” said World Bank Division Director for Kenya, Qimiao Fan.
The additional $500 million (Sh64.74 billion) sustainability-linked loan is tied to Kenya's commitments to reducing deforestation and expanding rural energy access.
The financing follows the government's recent publication of the Sustainability-Linked Financing Framework, signalling Kenya's growing use of performance-based borrowing instruments to support fiscal stability while advancing environmental and development objectives.
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