Kenya will receive a total of Ksh3.5 billion for development projects after receiving a debt relief amounting to Ksh4.2billion by Italy.
The agreement was signed at Treasury buildings last week by Finance Minister Amos Kimunya and Italy's Foreign affairs Deputy Minister Patrizia Sentinelli to convert the debt to development funds. The other agreements were of a loan and a grant. Kenya is the first country in Africa to benefit from this initiative.
Under the debt-for-development swap scheme, funds meant to service Italian debt will be set aside to finance pro-poor projects in health, education, water and sanitation in high poverty density regions in the country, Kimunya said.
The minister said that the waiver amounts to half of loans owed to Italy, currently standing at Ksh8.8 billion.
"The amounts were to be paid in 10 years, but instead they will be allocated to development projects agreed between the two governments starting this financial year for the next ten years," he said.
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