World Bank invests $200m in Kenya's efforts to manage climate risks
The World Bank has approved a $200 million International Development Association (IDA) credit to assist Kenya in managing the impacts of climate and disaster risks.
The Disaster Risk Management Development Policy Financing with Catastrophe Deferred Drawdown Option (Cat DDO) will provide Kenya with rapid access to funding in the event of a disaster or public health emergency, while supporting key reforms that strengthen the country’s ability to manage the impacts of disasters on the economy and the vulnerable.
“We are working closely with the National Treasury in supporting Kenya to address the economic losses triggered by climate-related disasters that often hamper poverty reduction efforts and threaten the numerous advances that Kenya has made in promoting shared prosperity,” said Diarietou Gaye, World Bank Country Director for Kenya. “Extreme climatic events have long threatened development progress in Kenya, where 84% of the land is classified as arid or semi-arid, and where droughts and floods are estimated to cost the economy over 2% of GDP each year on average.”
This project will support the government’s proactive efforts to manage disaster and climate risks with a comprehensive program of reforms that will minimize the burden of economic recovery for Kenya.
The Cat DDO will also support improvements in building the regulatory environment within Kenyan cities. With a growing concentration of population and assets in urban areas, the economic costs of natural hazards in Kenya are likely to increase in the future.
“There is a need to implement regulatory reforms to manage the risks associated with the concentration of poor and vulnerable people living in unsafe structures and often in informal settlements,” said Eric Dickson, World Bank Task Team Leader. “The Cat DDO will support policy reforms that fortify institutional and planning frameworks to strengthen resilience to disaster risks in Kenya.”
These efforts will also support the implementation of the National Disaster Risk Financing Strategy the first of its kind in Kenya, and in Africa, which seeks to proactively mitigate disaster’s long-term economic impacts and ultimately to defend the welfare and improve the resilience of Kenyans.
The project will be implemented by the National Treasury and Ministry of Planning.