World Bank Injects KSh174 Billion into Ruto’s Affordable Housing Project
The World Bank has unveiled a major financing package worth $1.35 billion (KSh174 billion) to accelerate Kenya’s affordable housing programme, offering one of the strongest international endorsements yet of President William Ruto’s flagship initiative.
According to newly published World Bank documentation, the multilateral lender will issue $375 million (KSh48.4 billion) in concessional financing and work with Kenya to structure a sovereign sustainability-linked loan intended to raise a further $900 million (KSh116.3 billion) from commercial financiers. In a separate commitment, the OPEC Fund for International Development will contribute an additional $75 million (KSh9.6 billion) to the same programme.
Plan to Expand Cheaper Home Loans
Under the new arrangement, the Kenya Mortgage Refinance Company (KMRC) — a State-backed institution established to deepen the mortgage market — will play a central role in refinancing home loans and distributing newly created affordable mortgage products.
The World Bank argues that the sustainability-linked loan will help Kenya diversify its borrowing sources while lowering its long-term financing costs. The facility, now in the pipeline, is expected to receive full approval by May 2026, marking one of the most ambitious attempts to link sovereign borrowing with measurable social impact.
A Growing Housing Crisis
World Bank analysts warn that Kenya is grappling with a severe housing deficit now exceeding two million units, with an estimated 250,000 new households formed each year. Yet formal construction has failed to keep pace, delivering fewer than 50,000 new homes annually.
“This shortfall has fuelled the expansion of informal settlements, where 62 per cent of urban residents now live,” the World Bank states, noting that housing shortages have escalated in rapidly growing cities such as Nairobi, Kisumu and Mombasa.
Affordability remains the largest barrier for most Kenyans. Data from the Bank shows that three-quarters of formal-sector employees earn below KSh50,000 per month, leaving many priced out of conventional mortgage products.
“Affordability is a constraint, as low- and middle-income households are essentially excluded from traditional mortgage markets,” the report adds, emphasising the need for targeted State-backed financing to close the gap.
Support for Ruto’s Signature Programme
President Ruto has repeatedly framed affordable housing as a cornerstone of his economic transformation agenda. His government has sought partnerships with multilateral lenders, private developers and foreign governments to inject capital into the sector and deliver tens of thousands of low-cost units nationwide.
The World Bank’s new commitment comes on top of earlier engagements through credit guarantee schemes aimed at helping informal and non-salaried workers qualify for mortgages — a demographic traditionally locked out of home ownership.
Other arms of the World Bank Group have also stepped in. The International Finance Corporation (IFC) has funded local developers constructing affordable homes and invested in the Green Affordable Housing Fund, which seeks to scale up environmentally sustainable residential projects across the country.
Gulf and Global Investors Courted
Beyond Washington-based institutions, President Ruto has turned to the Gulf region to expand investment in the programme. Recent engagements have seen increased participation from countries such as Saudi Arabia, whose financiers have signalled readiness to support large-scale housing developments in Kenya.
The combined financing efforts form part of a broader push by the Kenyan government to ease pressure on the housing market, stimulate construction jobs, and provide long-term mortgage options for millions of workers currently priced out of home ownership.
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World Bank Injects KSh174 Billion into Ruto’s Affordable Housing Project