Kenya plans to raise more than KSh 230 billion in program loans from the World Bank, African Development Bank (AfDB), and bilateral partners during the 2025/26 fiscal year, according to the Annual Borrowing Plan.
- •The program loans are expected to provide budget support on concessional terms, helping the government meet its financing needs while easing pressure on domestic markets.
- •Treasury data shows the World Bank will account for the bulk, with disbursements estimated at KSh 156 billion through Development Policy Operations.
- •The AfDB is projected to provide KSh 21.3 billion via policy-based operations, while bilateral partners are expected to contribute KSh 14.3 billion.
The inflows form part of Kenya’s wider external financing strategy, which includes project loans of KSh 211 billion and project grants of KSh 47 billion. Altogether, external sources are expected to cover roughly a third of Kenya’s net borrowing in FY2025/26.
- •The government has emphasized a preference for concessional borrowing to reduce exposure to high-cost commercial debt and improve debt sustainability.
Quarterly Program Loan Targets
| Source | Annual Target (KSh Mn) | Q1 (Sep 2025) | Q2 (Dec 2025) | Q3 (Mar 2026) | Q4 (Jun 2026) |
|---|---|---|---|---|---|
| World Bank (DPO + PfR) | 159,510 | 878 | 878 | 98,378 | 59,378 |
| AfDB (PBO) | 21,450 | – | 21,450 | – | – |
| Bilateral Support | 14,300 | – | 6,500 | 7,800 | – |
| Total Program Loans | 195,260 | 878 | 28,828 | 106,178 | 59,378 |
The program loans come against a backdrop of tight fiscal conditions. Kenya’s public debt stood at KSh 11.8 trillion as of June 2025, equivalent to 67.8% of GDP. Interest payments are projected at KSh 1.1 trillion in FY2025/26, consuming more than a quarter of government revenues.
Execution of the program loans also depends on the timely implementation of agreed reforms. For the World Bank, these include governance and fiscal transparency measures, while AfDB support is tied to sectoral policy shifts. Bilateral flows are expected to complement multilateral commitments.
The government hopes that concessional external financing will allow it to scale down reliance on domestic borrowing, which has recently driven up yields in the bond market. Domestic markets are still set to cover about two-thirds of net financing needs, mainly through Treasury bonds.
Kenya’s strategy also includes Liability Management Operations (LMO) such as bond buybacks, switches, and innovative approaches like a proposed $1 billion debt-for-food security swap with the World Food Programme.
