Given Kenya's classification as a lower middle-income country, the loan comprises a Sh79.5 billion credit from the International Development Association (IDA) and Sh26.5 billion from the International Bank for Reconstruction and Development (IBRD).

Treasury, which is facing its biggest revenue shortfall in over a decade, said the loan approval by the World Bank is a vote of confidence in the government's handling of the economy.

The World Bank also stated that the latest loan will support reforms that help advance the government's inclusive growth agenda, including affordable housing and support to farmers' incomes.

"The DPF thus complements the recently approved Kenya Covid-19 Emergency Response Project, which seeks to prevent, detect and respond to the Covid-19 outbreak and strengthen national systems for public health emergency preparedness," the bank added in a statement.

"This operation provides concessional resources to help Kenya navigate the current Covid-19 crisis and to cushion the impact on livelihoods and jobs, while supporting the continued operation of essential public services, said World Bank Country Director for Kenya Felipe Jaramillo.