World Bank has enhanced its potential loan kitty meant to plug budget deficit in Kenya during this financial year by a third bringing it to a whopping Sh129 billion ($1 billion).

According to a document shared on World Bank's website, Kenya had earlier indicated it was negotiating with the bank to receive Sh32.3 billion ($250 million) in budgetary support.

Kenya expects to use the extra funding it is seeking from the Bretton Woods institution to plug the budget discrepancy in the 2022-2023 financial year that ends on June 30.

“The program development objective is to enhance sustainable, inclusive and green growth by creating fiscal space in a sustainable manner, increasing competitiveness to boost exports in agriculture and improving governance to facilitate inclusive private sector-led development,” said the World Bank in the March 2, 2023 disclosure on the updated terms.

However, the World Bank lending to Kenya Government will have to be discussed and approved by the institution’s board before Kenya’s fiscal year terminates on June 30.

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The loan being sought by Kenya is a Development Policy Operations loan and is linked to a policy area that is pre-agreed upon and Kenya qualified for this type of loan in 2019.

Since qualifying for such type of credit, Kenya has received four such loans with the previous one being disbursed in March 2023 under the President William Ruto administration.

Treasury CS Njuguna Ndung’u in 2022 said the loan, which at the time stood at Sh96.8 billion ($750 million), will boost Kenya’s access to cheap funding according to the Ruto Government’s policy shift to external concessional loans.

Kenya is currently contending with numerous hurdles including high cost of living, financial constraints, a huge debt burden, a biting drought, and a shilling that is weakening each day.

The World Bank is an international financial institution that provides loans and grants to the governments of low and middle-income countries for use to pursue capital projects.