This is a sharp drop from the earlier projection of Ksh116.12 billion, or about $900 million.
The reduction means that nearly two-thirds of the private financing that was originally expected may no longer be available under the current structure.
The financing plan was part of a broader programme aimed at supporting Kenya’s affordable housing agenda and key economic reforms.
The project is designed to improve access to decent housing while also strengthening government systems that support long-term economic growth.
Affordable housing has been one of the government’s flagship development promises, aimed at reducing the housing shortage and improving living standards for low and middle-income earners.
The overall funding package being assembled with the support of the World Bank has also been revised. Initially, the programme was expected to cost about Ksh174.18 billion, which is approximately $1.35 billion.
However, the latest update shows that the total financing package has been reduced to around Ksh117.34 billion, equivalent to $910.3 million.
Despite the drop in the expected private sector contribution, officials from the World Bank have clarified that the revision does not mean the project itself has been scaled down or cancelled.
Instead, they explained that the changes reflect a review of how much funding can realistically be raised from commercial lenders.
Speaking to Bloomberg, a World Bank official indicated that the adjustment was necessary after reassessing market conditions and the willingness of private lenders to invest in the programme.
The official emphasised that the changes are meant to make the financing structure more practical and achievable.
The revision highlights the challenges developing countries often face when trying to attract private investment for large infrastructure and social projects.
Commercial lenders usually look at factors such as economic stability, repayment risks, and government policies before committing funds.
Any uncertainty in these areas can make lenders more cautious.
For Kenya, the reduced financing may slow down the pace at which housing projects and reform programmes are implemented.
The government may now be forced to explore alternative funding options, including increasing public spending, seeking more support from development partners, or restructuring parts of the project to match available resources.
The development comes at a time when Kenya is already under pressure to manage its public debt while still investing in development projects.
Balancing these two priorities has remained a major challenge for policymakers.