The first loan from AfDB of Sh4.9billion will be used to finance programme related to drought mitigation measures under the agriculture and livestock sectors.
Finance Minister Njeru Githae said the loan will finance water supply and related activities in six arid and semi-arid counties of Baringo, Turkana, Isiolo, Marsabit, Samburu and West Pokot.
“This is a long-term loan with a repayment period of 40 years and a grace period of 10 years. The interest rate is very minimal, at 1 percent for the first 11 years. However, the rate will be 3 percent after the first 20 years,” Githae said.
The programme will involve water resources development and management, livestock infrastructure for market access and livestock health management.
“We are appreciative of the bank’s financing efforts not only in the agricultural sector but in other sectors. Other beneficiaries include the roads sector, energy, education and water and sanitation,” the minister added.
AfDB Regional Director for the East Africa Resource Centre (EARC) Gabriel Negatu explained that the entire program would cover eight countries in the Horn of Africa over the next 15 years, including Eritrea, Somalia, South Sudan, Sudan and Uganda, in addition to the three countries in the current phase.
“It is necessary to have all the countries in the program because if one country has better water, pasture and livestock services, the pastoralist will move there and this could lead to overgrazing, transmission of trans-boundary animal diseases and conflicts. The next phase is expected to start as soon as funds are available for the remaining countries. This could be as early as end of 2013,” Negatu said.
Meanwhile the Treasury also signed another Sh82.7million loan agreement with the government of Japan to undertake a detailed study of the Narok Water Supply Project.
The project will include the construction of a high level reservoir for distribution of treated water through gravity.
Once completed, the project will provide clean water to a population of approximately 60,000 people in Narok and its environs.