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World Bank approves $750 million loan for Kenya’s COVID-19 recovery

Published

3 years ago

March 18, 2022

The World Bank, in an effort to accelerate Kenya’s ongoing inclusive and resilient recovery from the COVID-19 crisis, on Thursday approved a $750 million loan for the East African country.

The fund is under the Development Policy Operation (DPO) programme of the World Bank. It is expected to strengthen fiscal sustainability through reforms that contribute to greater transparency and the fight against corruption.

According to the World Bank, its finance policy provides rapidly-disbursing financing to help a borrower address actual or anticipated development financing requirements.

“DPF supports borrowers in achieving sustainable, shared growth and poverty reduction through a program of policy and institutional actions aimed at, for example, strengthening public financial management, improving the investment climate, addressing bottlenecks to improve service delivery, and diversifying the economy”.

The Washington-based lender said the loan is on concessional terms at an interest rate of about 3%, and will help the East African nation enhance the performance of its domestic debt market, reform the electricity industry and improve governance,

“The government’s reforms supported by the DPO help reduce fiscal pressures by making public spending more efficient and transparent, and by reducing the fiscal costs and risks from key state-owned entities,” Alex Sienaert, senior economist for the World Bank in Kenya, said in the statement.

It’s the fourth time in three years that Kenya has tapped the DPO facility, bringing cumulative borrowing to $3.25bn. East Africa’s biggest economy received $750m in June last year, $1bn in May 2020, and $750m in 2019. Requests for DPOs are presented to the World Bank’s board after the implementation of agreed reforms.

Critics of the World Bank argue that its loans are a mechanism of forcing free-market economics on countries through coercion. Countries with a debt crisis, whatever their other characteristics, agree to the bank’s package of legal and economic reforms, and the bank agrees to lend them money. Argentina, Ecuador, and India have all either weakened their labour legislation or amended their land laws to qualify for an adjustment loan. India is reported to have changed 20 pieces of major legislation.

Kenya consented to a raft of measures to secure the funding, including shifting government procurement to a new electronic platform to make transactions more transparent and reduce opportunities for corruption, the lender said. By the end of 2023, the programme aims to have five strategically selected ministries, departments, and agencies procuring goods and services through the electronic platform, it said.

Related Topics:Featured Kenya World Bank

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Canada’s First Quantum in pursuit of partners for Zambian assets

Published

7 hours ago

October 24, 2024

Ifeoluwa Dada

Without naming the companies, First Quantum Minerals, a Canadian miner, stated on Wednesday that it is in discussions with possible partners for its Zambian properties.

According to three people familiar with the matter, Reuters said last week that Saudi Arabia’s Manara Minerals is nearing an agreement to purchase a minority interest in First Quantum’s copper and nickel holdings in Zambia.

“We’re more open to partnerships, and that includes in Zambia, but only if it’s in the interest of our Zambian business, the Zambian government and all the stakeholders involved,” First Quantum CEO Tristan Pascall said on a conference call with analysts. The company’s shares were up 3% in early trade at C$18.93.

Copper is a highly sought-after component for the clean energy transition, as it is used to make electric cars and power data centres for artificial intelligence. The possible Manara Minerals deal, which may be worth between $1.5 billion and $2 billion, is in the news.

A stake sale in the Zambian mine would assist First Quantum in paying down its mounting debt following the Panamanian government’s order to close its flagship Cobre Panama mine last December in response to public outcry.

The business is awaiting a decision regarding the mine’s future and permission from Panama’s new government to transport 121,000 metric tonnes of trapped copper concentrate.

If that copper was approved for sale, working capital would be available to keep the mine operating. Monthly mining maintenance costs for the Canadian miner range from $11 million to $13 million.

Pascall cautioned that the business will need to reduce expenses, particularly staffing, in the coming months.

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Egypt reduces 2040 renewable energy target to 40%, prioritises natural gas

Published

4 days ago

October 20, 2024

Ifeoluwa Dada

Petroleum Minister Karim Badawi announced on Sunday that Egypt had reduced its 2040 renewable energy target down from a previous goal of 58% to 40%, highlighting the fact that natural gas will continue to play a significant role in the nation’s energy mix for years to come.

Egypt promised to increase the percentage of renewable energy output in its energy mix to 42% by 2035 before hosting the COP27 climate meeting in 2022.

Later, the aim was advanced to 2030. Mohamed Shaker, the then-minister of electricity, unveiled a bold proposal in June 2024 to increase this to 58% by 2040; however, that goal has since been abandoned.

“This is a message to all of us to work together to increase discoveries and attract more investments through the bids being offered for exploration, aiming to achieve discoveries in the region, which holds more wealth, particularly natural gas,” Badawi said in the opening session of the Mediterranean Energy Conference 2024.

Egypt’s persistent dependence on fossil fuels coincides with efforts to regain the confidence of international oil companies, whose domestic activities ceased due to a shortage of hard currency that put the nation in debt to the tune of billions of dollars.

Since entering office in July, Badawi has met with many foreign energy corporations, such as Eni of Italy, which intends to increase production in Egypt’s largest gas field, Zohr, by digging additional wells in early 2025.

At its peak of 3.2 billion cubic feet per day (bcf/d) in 2019, Zohr’s gas output allowed the nation to turn a profit.

However, by early 2024, output had dropped to 1.9 bcf/d, forcing Egypt to import more gas through a pipeline connecting it to Israel and more LNG to avoid a months-long load-shedding program.

Additionally, Egypt imports fuel oil that contains sulphur; in September, imports reached a record-breaking 255,000 barrels per day (bpd), the highest level since at least 2016.