The government borrowed six loans amounting to Sh305 billion despite the outcry over the swelling public debt.
Documents tabled in Parliament yesterday showed that three of the loans have been disbursed by the multilateral and commercial lenders.
Treasury says that the proceeds of the loans will finance infrastructure projects in education while commercial financing will be used to fund the current budget – including refinancing maturing debt.
The first loan of Sh5.9 billion signed in December 2018 is for the East Africa Skills Transformation and Regional Integration Project.
It was extended by the World Bank’s International Development Agency and attracts an interest of 1.25 per cent from April 2024.
“The purpose of the loan is to increase access and improve the quality of technical and vocational training (TVET) programmes,” the document reads.
Some Sh593 million was sourced from the Africa Development Bank in April and will be spent on the Green Zones Development Support Project.
The project will be implemented in Embu, Meru, Machakos, Tharaka Nithi, Nyeri, Murang'a, Kirinyaga, Kiambu, Nyandarua, Nakuru, Baringo, Kericho, Bomet, Nyamira and Kisii.
“These counties cover four forest conservancies and three out of the five Kenya water towers. The project will focus on increasing the national forest cover and household incomes,” the Treasury document says.
Kenya also signed a Sh4.2 billion loan with Africa Development Fund for the said project which will be executed by the Environment ministry through the Kenya Forest Service.
Further, the Treasury signed a Sh93.4 billion loan with Citigroup Global Market Europe AG for infrastructure projects and to refinance part of the 2014 Eurobond.
Another Eurobond of Sh124 billion was extended to the government in May for infrastructure and also for some of the country’s debt obligations.
IDA extended a Sh76.9 billion loan to support the affordable housing project and enhance income for farmers in line with the food security agenda.
The loans have been extended at a time the country’s public debt has elicited concerns, especially with the latest efforts by the Treasury to raise the cap to Sh9 trillion. The current debt stands at Sh5.8 trillion.
