Written by
Faridah N Kulumba
Africa-Press – Kenya.The World Bank Board of Directors, on 26 October 2021 approved a Sh16 billion International Development Association (IDA) financing agreement which is aimed at strengthening local resilience to the impact of climate change in Kenya.
This will be done through the financing of the locally-led Climate Action (ELLoCA) programme which is part of Kenya’s 10 year government financing locally-led climate action programme launched in June 2020.
The Aim
Climate change remains the biggest challenge of Kenya’s climate sensitive economy being prone to droughts and floods with an economic liability of up to 2.8 percent of Gross Domestic Product (GDP) annually. Kenya has an immediate need to build climate resilience in sectors such as agriculture, water, energy tourism and wildlife which are not only affected by climate change but also by the adverse effects of the Covid-19 pandemic, explained Treasury Cabinet Secretary Ukur Yattani.
The programme will support the scaling up of community-led climate actions while developing the capabilities of national and county institutions to plan, budget, report, finance and implement green initiatives at the local level.
Implementation
At the national level, the programme will strengthen the national government’s capacity to support county government actions, enhance the collaboration between national entities on climate change, and facilitate national oversight of the program.
At the county level, the programme will be implemented under the Program for Results (PforR) instrument in which countries will receive their annual disbursements based on their performance against a specified results-based criterion. Notably, 87.5 percent of the program resources will be spent at the country and community level, demonstrating the commitment to ensure climate finance reaches the lowest levels and those most vulnerable to climate risks. The PforR instrument will support community-level climate resilience investments while at the same time incentivizing system changes and strengthening county government climate finance and governance systems.
The implementation of the five year programme will be led by the National Planning given its strong emphasis on climate finance with the adoption of the innovative participation, climate information, demand-driven capacity building and monitoring and evaluation of climate change action.
Uhuru’s remarks
Kenyan President Uhuru Kenyatta emphasized the need for increased funding on climate change to mitigate the negative effects being experienced. Mr Uhuru cautioned that in the absence of urgent climate change adaptation action, Africa’s GDP risks contracting by up to 0 percent by the year 2050.
According to President Uhuru, he noted that despite Kenya significantly increasing the amount of financial resources invested in adaptation programs in recent years, the country needed more international support to fully implement its updated Nationally Determined Contributions (NDCs).
Why World Bank
The World Bank’s International Development Association(IDA) established in 1960, helps the world’s poorest countries by providing grants and low to zero interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA has supported development work in 113 countries. Annual averaged about $21billion over the last three years, with about 61 percent going to Africa.
Donar financing to Kenya has been a blend of both grants and loans. Evidence from recent analysis on the Kenyan aid landscape before and after covid-19 suggests that grants are declining and loans are increasing. According to data published between 2018 and 2021, shows that the government of Kenya borrowed US$4.2 billion from the World Bank and African Development Bank(AfDB)
If IMF loans in the same period are added, the amount comes to US$7.3 billion. For the period under review the IMF has now provided 42.6% of the borrowing compared to 38.2% from World Bank and 19.3% from AfDB.
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