Kenya secures $450 m World Bank loan as Iran war and El Niño threaten economy

Kenya is finalising a Contingent Emergency Response Project with the World Bank that would provide about $450 million of emergency financing. The facility reallocates up to 10 % of undisbursed funds from existing World Bank projects, allowing rapid access without adding new debt. The loan is expected by October after Central Bank Governor Kamau Thugge announced the plan in April.

The financing is sought amid mounting external shocks. The conflict involving Iran and the Strait of Hormuz has driven oil prices up, and analysis by environmental group 350.org estimates the price surge could cost Kenya up to $800 million by the end of the year, straining public investment, widening the trade deficit and fuelling inflation. President William Ruto has warned that Kenya’s reliance on imported fossil fuels makes the economy vulnerable. In addition, the country is preparing for a possible strong El Niño event later this year, which could bring heavy rains, flooding and crop losses, further threatening the agriculture‑dependent economy.