World Bank Approves US$100 Million for Municipal Reforms in Kenya

May 5, 2010

WASHINGTON, May 4, 2010—The World Bank has approved a credit of US$100 million to improve service delivery in Kenya’s municipalities.


The International Development Association (IDA) credit for the Kenya Municipal Program approved by the Bank’s Board of Executive Directors today will focus on strengthening local governance, institutions, and physical infrastructure, with the ultimate objective of improving services delivered to Kenyans in the 15 largest municipalities. It will also improve the viability of the five largest cities and all provincial capitals. 


“Kenya’s municipalities are critical to economic growth and regional equity but are operating far below their potential, due to infrastructure bottlenecks, weak finances, and poor management,” said Johannes Zutt, the Country Director for Kenya. “Rapid urbanization has left Kenyan cities with a huge unmet demand for critical infrastructure and basic services, and this has constrained the productivity of businesses and negatively impacted the quality of life of residents.”


The Municipal Program will support Kenya’s Vision 2030, the country's development blueprint which identifies urbanization as one of the key development challenges, and will deepen the reforms that the government has undertaken since 1996 to strengthen accountability by local authorities. It will also strengthen the capacity of municipalities to cope with the rising demand for quality services arising from the rapid increase in urban population.


In 1999, Kenya’s urban population was about 10 million people, representing 35 percent of the country’s total population. The five largest cities, including Nairobi and Mombasa, accounted for a third of the urban population. It is estimated that this population will rise to 16.5 million people (45 percent of the population) by 2015 and increase further to 23.6 million people or 54 percent of the population by 2030.


“The urban transition in Kenya will play a critical role in determining the country’s growth prospects and social stability,” said Sumila Gulyani, Task Team Leader for the Program. The government recognizes that the quality of life in cities cannot improve without strong performance of the level of government that is closest to citizens,” she said. 


The Bank funding is part of the US$165 million that is being invested in the program by the government and development agencies. The other partners in the program are the Swedish International Development Agency (SIDA) and Agence Française de Développement (AFD)—the French international development agency.


The program is the first World Bank project that will underpin the transformation of the urban and local government sector. Two other projects are under consideration—an Informal Settlements Improvement Program, which will focus on improving the quality of life in Kenya’s rapidly-expanding slums, and the Nairobi Metropolitan Services Project, which will strengthen the development potential of Kenya’s largest and economically most important conurbation.


The credit is provided on standard IDA terms, which include a 10-year grace period and a 40-year maturity period.

Media Contacts
In Nairobi
Peter Warutere
Tel : (+254 20) 3226444
In Washington
Herbert Boh
Tel : (+1 202) 4733548