The International Monetary Fund's (IMF's) executive board on Monday signed off on nearly $1-billion in new funding for Kenya that could ease pressure on government finances in East Africa's largest economy, the global lender said in a statement.

The IMF said the board completed the fifth reviews under Kenya's Extended Fund Facility and Extended Credit Facility, allowing for an immediate disbursement of about $415.4-million, and extended those arrangements to 48 months from 38 to give Kenya more time to implement reforms.

It also approved a new 20-month arrangement under the IMF's Resilience and Sustainability worth about $551.4-million that will support Kenya's climate resilience efforts.

The IMF said Kenya had made good progress in implementing economic reforms despite facing the worst drought in decades, as well as a challenging external environment.

IMF Deputy Managing Directory Antoinette Sayeh said Monday's actions would allow Kenyan authorities to continue to address such challenges, sustain market confidence, promote growth, and advance ongoing reforms.

She said approval of Kenya's fiscal 2023-2024 budget and the 2023 Finance Act were "crucial steps" needed to support ongoing consolidation efforts and reduce debt vulnerabilities while protecting social and development expenditures.

Tighter financing conditions also required a "prudent debt policy" and continued efforts to prioritize concessional loans, she said.