By James Anyanzwa
- Posted on: 05th Feb 2013 00:00:00 GMT +0300
The Government has signed a loan agreement of Sh1.3 billion ($15 million) with the Organisation of the Petroleum Exporting Countries (OPEC) Fund for International Development (OFID). The proceeds of the loan will go towards co-financing the Electricity Expansion Programme that is supported by the World Bank.
The funds would be spent particularly on the country’s energy infrastructure projects, which seek to increase access to modern, clean, and affordable energy services through the expansion and upgrading of energy-related infrastructure.
Finance Minister Njeru Githae said the programme envisages to cover 300,000 new household connections, small businesses and public institutions, thus improving the standards of living, as well as increasing the level of household incomes in the areas covered by this project.
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“We have made commendable achievements in addressing the social economic problems that the country has been facing. However, we still have a long way to go and need to do more to realise fully our Vision 2030 development goals,” Githae told reporters after signing the loan agreement at the Treasury in Nairobi on Monday.
He said the Government would be counting on external partners — and particularly OFID — to scale up investments in education, health, agriculture and physical infrastructure.
The 20-year loan, which has a grace period of five years, is priced at a rate of 1.75 per cent, with a service charge of one per cent.
OFID has committed nearly $182 million (Sh15.5 billion) to co-finance projects covering a wide range of sectors in Kenya. The majority of the funding is directed towards projects in the transportation, agriculture and energy sectors, followed by health, education, national development banks, and water supply and sanitation sectors.
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“We are convinced that democracy in this country (Kenya) is a real one,” said Suleiman Al-Herbish, the Director General of FID, a multilateral development finance institution established in 1976 by the Members of OPEC.
The primary objective of OFID is to contribute to the social and economic development of low-income countries. By the end of November last year, OFID had committed over $15.1 billion (Sh1.3 trillion) in development financing to 133 countries spread across Africa, Asia and the Pacific, Latin America, the Caribbean and Europe. Githae noted that the Government has taken steps to ensure free, fair and transparent elections.
“What is more encouraging is that Kenyans in general are doing their part to ensure peace prevails before, on the material date and after elections. This is because as a people we know peace is the foundation on which we can expect to realise our dreams as per Vision 2030,” he said.
Kenya OPEC loan