The Treasury is in discussions with the World Bank and the African Development Bank to secure a combined Ksh127 billion loan aimed at reducing the country’s growing budget deficit.

The loan package comprises a Ksh94 billion Development Policy Operations (DPO) facility from the World Bank and a Ksh34 billion policy‑based loan from the AfDB, according to The Africa Report.

Treasury Public Debt Management Director General Raphael Owino said both facilities are expected to be disbursed before the close of the 2026/2027 financial year.

Kenya is already negotiating the reform agenda required for the World Bank DPO, a $725 million tranche, and expects to finalise the reform list before the loan is released.

The World Bank funding is conditional on reforms to public financial management, governance, disclosure of officials’ private interests, tighter public‑private partnership rules, whistle‑blower protection and amendments to the Public Finance Management Act.

Kenya’s fiscal outlook shows the deficit widening to Ksh1.288 trillion in 2026/2027, driven by higher domestic debt interest payments and lower projected revenues, intensifying the need for external financing.

The loan follows a Ksh97 billion World Bank operation approved in June 2026 and comes as Kenya also explores a debut panda bond in China, Samurai bonds in Japan, and a renewed IMF programme.

President William Ruto’s administration has formally requested a new IMF programme, but talks have stalled after a transition in the IMF’s Kenya team, with a new mission expected only by late November or early December.