Devolved units to receive Ksh79.2B additional funds in proposed bill
By Rawlings Otieno, July 10, 2025Kenya’s 47 devolved units are set to receive Ksh79.2 billion cumulatively as part of the County Governments’ Additional Allocation in the 2025-26 financial year, if a new bill is passed into law.
The County Governments’ Additional Allocations Bill, 2025, specifies conditional additional allocations to county governments from the proceeds of loans or grants from Development Partners in the 2025/2026 financial year.
In addition, the bill makes provision for the transfer of conditional and unconditional additional allocations from the National Government’s share of revenue and from development partners to county governments for the financial year 2025/2026.
Sponsored by Senate Finance and Budget Committee chair Ali Roba (Mandera), the bill – if passed – will ensure that counties access additional funds from the National Government and development partners to facilitate the exercise of their functions.
The devolved units will receive Ksh56.9billion as part of the conditional additional allocations to county governments from proceeds of loans or grants from Development Partners in the 2025/2026 financial year.
The amount includes Sh13billion loan for the Second Kenya Devolution Support Program (KDSP2) – Service Delivery and Investment Grant (Level 2), Ksh10.3 billion from the International Development Association (IDA) (World Bank) for the Second Kenya Urban Support Project (KUSP2) – Urban Development Grant (UDG) and Sh6.18 billion for the County Climate Resilience Investment (CCRI) grant.
Another Ksh7.7 billion from the World Bank will fund the National Agricultural Value Chain Development Project (NAVCDP), the Kenya Water, Sanitation and Hygiene (KWASH) Program funded by the German Development Bank will gobble Ksh4.6 billion, while the Food Systems Resilience Project (FSRP) will cost Ksh3.2 billion.
Water development
The Water and Sanitation Development Project (WSDP) will be financed at a cost of Ksh3 billion across the devolved units, the Kenya Urban Support Project (KUSP) – Urban Institutional Grant (UIG) will be allocated Ksh1.3 billion while German Development Bank will finance the Drought Resilience Programme in Northern Kenya (DRPNK) at a cost of Ksh1.27 billion.
Counties will also receive Ksh1.2 billion from the German Development Bank for the co-financing County Climate Resilience Investment (CCRI) Grant.
Further the Kenya Informal Settlement Improvement Project 2 (KISIP2) will be financed by the Agence Française de Développement (AFD) at a cost of Ksh1 billion while the Kenya Informal Settlement Improvement Project 2 (KISIP2) will be funded at a cost of Ksh840 million and the Kenya Livestock Commercialization Project (KeLCoP) will be funded at a cost of Ksh634.5 million.
In addition, Danish International Development Agency (DANIDA) Grant for the Primary Healthcare in Devolved Context (PHC) programme totalling Ksh510 million.
International Fund for Agricultural Development (IFAD) loan for the Aquaculture Business Development Programme (ABDP) totaling Sh200 million and IDA (World Bank) Credit for Financing Locally-Led Climate Action (FLLoCA) Program – County Climate Institutional Support (CCIS) Grant (Ksh121million) respectively.
The Bill also intends to facilitate the transfer of the conditional and unconditional additional allocations made to counties from the Consolidated Fund to the respective county revenue funds and special purpose accounts.
The Bill provides that additional allocations constitute funds agreed upon by the Senate and the National Assembly during the consideration of the Budget Policy Statement and comprise additional allocations provided to county governments from the National Government’s share of revenue, either conditionally or unconditionally, pursuant to Article 202(2) of the Constitution.
It further provides the additional allocations from the National Government and development partners required for the performance of functions transferred to county governments from the National Government pursuant to Article 187 of the Constitution, and additional allocations from loans and grants provided by development partners.
Unconditional allocation
“Each county government’s unconditional additional allocation will be transferred to the respective county revenue fund in accordance with a payment schedule published in the Gazette by the Cabinet Secretary responsible for finance in accordance with section 17 of the Public Finance Management Act,” reads part of the bill.
Contained in the bill is the allocations for the County Aggregation and Industrial Parks (CAIP)s programme to Baringo, Elgeyo Marakwet, Kajiado, Kakamega, Kericho, Kilifi, Kisii, Kitui, Laikipia, Mandera, Narok, Nyandarua, Nyeri, Taita Taveta, Tana River, Tharaka Nithi, Vihiga and Wajir county governments at a cost of Ksh4.5 billion.
The devolved units, Isiolo, Lamu, Nyandarua, Tana River and Tharaka Nithi will receive Ksh454million to supplement the construction of their county headquarters.
According to the Bill, unconditional additional allocations of Ksh11.5 million will be dished out to Kiambu, Kisumu, Kitui, Laikipia, Machakos, Migori, Mombasa, Nairobi, Nakuru and Nyeri county governments from court fines in the financial year 2025/2026.
According to the Bill, Baringo, Embu, Garissa, Isiolo, Kajiado, Kakamega, Kiambu, Kilifi, Kirinyaga, Kisii, Kitui, Kwale, Machakos, Makueni, Mandera, Marsabit will pocket Ksh2.9 billion from the 20 per cent share of mineral royalties for the financial year 2025/2026.