The World Bank's executive board of directors have approved two international Development Association (IDA) credits totalling 102m dollars (8bn shillings) to expand electricity generation and distribution and help develop the micro, small and medium size enterprise sector in Kenya.

The approval was made in Washington DC last Friday [16 July] even as bilateral donors threatened the country with an aid freeze citing the failure of President Mwai Kibaki's government to tackle new corruption.

The bank, which in 1997 spearheaded a campaign to impose aid embargo on the former KANU [Kenya African National Union] regime over corruption charges, this time round appears to have broken ranks with the other development partners to keep its disbursement programme firmly on course. The power sector funds are mainly earmarked for revitalization of the Kenya Power Lighting Company (KPLC) and to enhance KenGen's power production capacity.

"The KPLC project aims to connect about 400,000 new consumers to the national power grid over the next five years and increase the overall access to reliable supply to meet expected increases in power demand," said Makhtar Diop, the World Bank's resident representative.

Speaking in Washington, Diop said the energy sector had been identified as critical to lowering the cost of doing business in Kenya. [Passage omitted]