Government disburses Sh 1.67bn in conditional grants to counties

OLIVER MWENDA-PCO

The State Department for Devolution has disbursed KSh 1.67 billion in conditional grants to all 47 counties, marking a major milestone in strengthening institutional capacity and service delivery under the Second Kenya Devolution Support Programme (KDSP II).

KDSP II is a four-year initiative funded by the Government of Kenya, with support from the World Bank. The programme is coordinated by the State Department for Devolution and implemented jointly by 18 Ministries, Departments, and Agencies (MDAs), together with the 47 county governments.

The core objective of the programme is to enhance county performance in the financing, management, coordination, and accountability of public resources.

Through the Level 1 Institutional Strengthening Grant, each county has received KSh 35.25 million. These conditional grants are designed to support counties in undertaking key institutional reforms and building internal capacity.

Principal Secretary for Devolution, Michael Lenasalon, hailed the disbursement as a critical achievement.

“Distributing the first round of KDSP II funds is a key milestone that enables counties to begin their scheduled reform projects.”

“These grants, captured in the FY 2025/26 budget estimates, are intended to strengthen counties’ governance and financial systems for high-level service delivery,” said Lenasalon.

Counties will utilize the funds to implement activities outlined in their approved KDSP II Institutional Strengthening Work Plans.

Eligible expenditures are guided by the program’s financing agreement and appraisal document. 

Each must demonstrate compliance with the operational manual, sign a participation agreement with the State Department for Devolution, establish governance units such as the County Programme Steering Committee and County Project Implementation Unit, and integrate the grants into their Annual Development Plan and county budget.

Looking ahead, counties will be assessed on how quickly they transfer funds from the County Revenue Fund Account to Special Purpose Accounts.

According to the PS, the Level 1 grants are meant to “incentivize core institutional reforms” and build the internal capacity necessary to unlock Level 2 Governance and Service Delivery Grants.

These subsequent grants will focus on developing local infrastructure and enhancing service delivery.

KDSP II builds on the foundations laid by the first phase of the program, implemented between 2016 and 2021.

National Programme Coordinator Samuel Nyaga affirmed that the coordination unit is ready to support counties as they begin spending their disbursed grants.

“We are prepared to provide the right support to ensure counties adhere to the expected standards in utilizing these funds,” he said.

The programme has a total approved funding of approximately 140.7 million Euros, underscoring Kenya’s commitment to strengthening devolved governance.

The ceremonial launch of KDSP II in Naivasha brought together key leaders, including Deputy Governors, the Principal Secretary for Devolution, World Bank officials, and members of the Council of Governors.