The World Bank approves a second $125 million loan to Somalia.

 

Mogadishu - The World Bank Executive Board has approved a second $125 million development policy loan for Somalia, provided by the International Development Association (IDA).

This new measure is the second and final phase of a program aimed at strengthening Somalia's economic resilience, supporting sound public financial management, and sustainable private sector development. The first tranche of the same $125 million was disbursed in 2024.

Hideki Matsunaga, World Bank Country Director for Somalia, said the new financing demonstrates the Somali government's commitment to implementing key institutional reforms that will contribute to building a stable government and strengthening social cohesion.

The funding will specifically focus on enhancing the government's financial sustainability by increasing tax revenues and improving the efficiency and effectiveness of government spending.

The program also aims to reduce dependence on international aid, invest in renewable energy, and expand access to electricity, with the goal of reaching a total electricity generation capacity of 50 megawatts by the end of 2026.

Regarding private sector development, the program focuses on developing microfinance, establishing a drought insurance system, and encouraging investment in the fisheries sector to increase seafood exports.

All of these efforts are part of the World Bank-Somalia partnership outlined in the 2024-2028 plan and are being implemented in collaboration with international development partners.