Kenya seeks $450m World Bank emergency funding as war, weather risks grow

Kenya is in talks to secure about $450 million in emergency funding from the World Bank as the government races to protect the economy from rising oil prices linked to the conflict in the Middle East and the threat of severe El Niño weather later this year.

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According to people familiar with the discussions, the government is finalising a Contingent Emergency Response Project, an emergency financing arrangement that would allow the World Bank to quickly release funds if the country is hit by major economic or climate related shocks.

The financing is expected to be available by October, when forecasters say El Niño conditions could become stronger across East Africa. However, the amount and timing of the package could still change as negotiations continue.

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The proposed support comes as Kenya faces mounting pressure from higher global energy prices. The country imports most of its fuel, making it highly vulnerable to oil price increases caused by the conflict in the Middle East.

Higher fuel prices have pushed up transport costs, increased production expenses for businesses and farmers, and made fertiliser more expensive. Those pressures have fed into higher food prices and added to the cost of living for households.

At the same time, the country is preparing for possible weather related disruptions. The World Meteorological Organisation has warned that a strong El Niño event is likely to develop between August and October, increasing the risk of above normal rainfall and extreme weather across much of the region.

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If those forecasts prove accurate, Kenya could face widespread flooding, damage to roads and other infrastructure, disruption to farming activities and significant losses for vulnerable communities.

The conflict in the Middle East has also disrupted global shipping routes, driving up freight costs and creating fresh challenges for international trade. The resulting uncertainty has weighed on investor confidence and put additional pressure on foreign exchange earnings.

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Unlike a conventional development loan, the proposed financing would be provided through the World Bank’s emergency response framework, which allows countries to redirect funding from existing projects to deal quickly with unexpected crises.

The World Bank has previously warned that oil importing African economies, including Kenya, are among the countries most exposed to higher fuel and food prices caused by geopolitical tensions.

The lender recently lowered its forecast for Africa’s economic growth in 2026 to 4.1 percent while raising its regional inflation forecast to 4.8 percent, citing the impact of rising global geopolitical risks.

If approved, the emergency funding would give Kenya additional fiscal space to respond to the combined effects of external economic shocks and extreme weather while helping to protect households, businesses and the wider economy.

“The facility is designed to help countries respond rapidly when unexpected crises threaten economic stability,” the World Bank has said of its emergency response framework.