Joseph Bonyo
14 November 2007
French development agency, Agence Francaise de Developpement (AFD) will increase its funding to Kenya by 294 per cent to Sh73 billion (750 million euros) through concessional loans for various development projects.
According to Mr Jean-Niche Severino, chief executive AFD, the loan will be spread over a period of five years. He however, added that they were yet to get partners willing to take the loans for development. "As soon as we get willing partners for development projects, AFD will roll out the loans to them," pointed out Mr Severino.
Since 1997, the organisation has committed Sh18.5 billion (277 million euros) to various development programmes across the country. These have been either as direct loans, concessional loans or grants to both public and private institutions.
Addressing a media briefing a Nairobi hotel, Severino said that 38 per cent of their projects were concentrated in the energy sector.
Among the projects is the rural electrification programme in western Kenya at a cost of 9.2 million euros. The project was completed last year.
"We would like to see economic growth being improved, and energy is the only qualitative dimension to benefit the people and sustain the growth," noted Mr Severino. AFD is also behind the Kisumu Water and Sanitation project for which it has already received concessional loans worth Sh1.9 billion (20 million euros).
It will be implemented in two phases, with work on the first phase already completed at a cost of Sh1.35 billion (14 million euros). Through AFD, KenGen has received a non-sovereign concessional loan for its Kipevu combined cycle generation plant.
This will allow for financing the conversion of a gas turbine plant into a combined cycle for better power production and less damage to the environment. AFD's subsidiary, PROPARCO dedicated to the private sector, has 45 companies in Kenya as beneficiaries of its financial investments.
Earlier in the year, PROPARCO teamed up with another financial institution DEG to inject Sh375 million ($5.6 million) to strengthen I&M Bank's equity base. AFD is a financing agency of the French government has been operating in the country since 1997.
It supports both public and private sector in the implementation of economic and social projects. Mr. Severino is touring projects sponsored by AFD. The visit coincides with the agency's 10-year celebration of its presence in Kenya.
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