The World Bank has granted Kenya 16.7 billion shillings (about $150 million) to support the country’s climate action plan, the National Treasury said Wednesday.

The Treasury said the money would be used to strengthen local resilience to the impact of climate change through a 10-year programme dubbed financially locally-led climate action starting in 2020.

“Climate change remains the biggest challenge of our age, with Kenya’s climate-sensitive economy being prone to droughts and floods with an economic liability of up to 2.8 per cent of the GDP annually,” it said.

It said the funds would help strengthen the response to climate change.

Keith Hansen, World Bank country director for Kenya said that Nairobi had demonstrated leadership in establishing a policy framework to manage climate risk though climate action “is still underfunded.”

Mr Hansen said financing from the bank’s International Development Association (IDA) would strengthen the national government’s capacity to support government actions.

The WB director added that it would enhance the collaboration between national entities on climate change and facilitate national oversight of the programme.

Nicholas Soikan, World Bank Senior Social Development Specialist and Task Team Leader, said communities in rural Kenya, especially those in arid and semi-arid regions which had been affected by the impacts of climate change would be the primary beneficiaries of the programme.

“Also those affected with droughts and floods, outbreaks of climate-related diseases, low farmland productivity and declining livestock will be beneficiaries.”

The IDA financing would be supplemented by a grant of $21.4 million from the Social Sustainability Initiative for All Umbrella Multi-Donor Trust Fund with resources from Denmark and Sweden, making a total of $171.4 million.

According to the Treasury, through the financing agreement, Kenya will be a global pioneer in operationalising social resilience principles of devolved finance and participatory climate-risk management.