The government has signed a €2.5 million (Sh389 million) financing agreement with Equity Bank and the German government. The funds, according to Treasury cabinet secretary Njuguna Ndung’u, will go towards supporting about 6000 small scale farmers in the country and establish irrigation schemes.
The signing of the amended subsidiary financing agreement was signed between Prof Ndung’u, Equity Bank chief executive officer James Mwangi, German Ambassador to Kenya Sebastian Groth, and Water and Irrigation cabinet secretary Alice Wahome.
In a statement released after the signing of the agreement, Prof Ndung’u said the additional blended financing will scale up irrigation activities to address food security in the country.
He said the government is keen on developing and protecting markets to generate income, hence the need to establish self-sustaining, resilient and climate smart off-budget /off debt projects.
The loan will see over 1500 farmers in Embu, Tharaka Nithi and Kirinyaga counties get loans to construct five irrigation projects to cover 1300 acres of land under irrigation.
The signing of the deal follows previous commitments that the government has received in the last couple of months for additional funding to help run programmes in the country.
Both the World Bank and the International Monetary Fund have agreed to provide additional funds and loans to the government in a move to help ease the financial constraints in the country.
The World Bank had in May, announced that it had approved a $1 billion loan to Kenya to support the country’s budget, amidst rising commodity prices and the weakening shilling.
The Bank said that the lending would be done through an instrument called a Development Policy Operations (DPO) loan, which commits the country to instituting reforms aimed at creating fiscal space, improving agricultural competitiveness and improving governance.
And in the same month, the IMF also announced that it had agreed to a $1 billion loan for Kenya to help with its liquidity and economic difficulties.
If approved, the IMF agreement which is currently pending approval of the IMF’s executive board will see the country immediately access about $410 million.
Consequently, the financial institution said its commitment to Kenya would be increased to another $3.52 billion.
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