Germany Issues Ksh31.5 Billion Loan To Kenya For Infrastructural Development
The administration said on Tuesday that it had reached a multibillion-dollar agreement with the German government to finance many development projects in the country, with grants and debts accounting for a portion of the funds.
Treasury Cabinet Secretary John Mbadi announced that the agreements were made after months of negotiations with the German government to fund critical strategic development possibilities in the country.
Speaking after meeting Jochen Flasbarth, German Secretary for Development Cooperation, Mbadi stated that following the meetings, Kenya entered into a debt exchange agreement with Germany for an extension of Ksh9 billion (€60 million) to improve vital rural roads in Kenya.
“A €60 million agreement (Ksh9 billion) over five years was established, with proceeds earmarked for financing the Locally-Led Climate Action Program (FLLoCA), enhancing farmer-market linkages through improved rural roads in Western Kenya, developing the Bogoria-Silali steam field, and implementing the renewable energy enhancement facility and grid stabilization program,” National Treasury announced.
This evening, CS Hon. FCPA John Mbadi held high-level bilateral talks with Mr. Jochen Flasbarth, Secretary for Development Cooperation of the Federal Republic of Germany.
— The National Treasury & Economic Planning (@KeTreasury) December 3, 2024
The discussions centred on deepening Kenya-German cooperation in critical sectors, including energy,… pic.twitter.com/QFCaeZwWgS
According to Mbadi, the funds would be distributed through the Locally Led Climate Action Program (FLLoCA) to assist Kenyan farmers in getting their products to market on time.
The funds will also be used to build the Bogoria-Silali steam field geothermal producing center, which would provide Kenyans with better access to sustainable energy.
As a result of a government-to-government negotiation agreement, Germany has pledged to providing Kenya with Ksh13.5 billion in technical and financial development support between 2024 and 2026.
The allocation will go a long way toward funding the exchange of financial skills and development.
The decision to provide Kenya the funds was made following government-to-government consultations that took place around the end of last month.
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“During the November 2024 biennial talks, Germany committed €90 million for technical and financial development cooperation for the 2024-2026 period,” the statement from the Treasury revealed.
The German government has also allocated an additional Ksh9 billion to boost Kenya’s reform-oriented budgetary expenses.
Kenya is currently facing significant financial challenges as a result of its inability to support the fulfillment of debt obligations.
Furthermore, the government has struggled to establish the required systems to consistently meet its revenue targets during the last few years.
Germany Issues Ksh31.5 Billion Loan To Kenya For Infrastructural Development
