Two scholarship schemes by the State and the Equity Group Foundation (EGF) are at risk of losing out on Sh1 billion funding from the German government amid claims of unmet terms for disbursement.
New disclosures show that Kenya has been struggling to get the cash from Germany’s KfW Development Bank for the scholarships to 805 technical and vocational educational Training (TVET) learners and 315 secondary school students, even as a December 2026 deadline for the initiatives approaches.
The TVET and secondary school scholarships run separately but are implemented through the EGF banner known as ‘Wings to Fly’.
The two initiatives have been running since March 2021 (for the 315 secondary students) and August 2022 (covering 805 TVET learners).
Auditor-General Nancy Gathungu, however, notes that by last June, the State had not used Sh1.18 billion (7.8 million euros) of the funding provided by KfW Development Bank, raising the risk of losing out on more than three-quarters of the funding.
Kenya and Germany partnered to support bright students from poor families get the scholarships, as EGF serves as the implementing partner, including identifying beneficiaries and sending support to schools.
KfW Development Bank offered a funding of 9.8 million euros (about Sh1.48 billion in current exchange rate terms), including 7 million euros for the TVET programme, and 2.8 million euros for the secondary school scholarship.
Ms Gathungu now reports that in the last financial year ending June 2025, no funding was released for the TVET scholarship initiative, despite having a Sh160 million budget.
“The State Department did not receive funds from the donor—KFW during the year despite having an approved budget amount of Sh160 million,” she said.
The audit notes that while the donor is ready to finance the project up to EUR 7 million, the State had used only Sh74.7 million (679,284 euros).
The low rate of tapping the funding, the public auditor reckons, is jeopardising the objective to expand access and equity by providing scholarships and support to vulnerable and deserving youths to pursue TVET learning.
“No explanation was provided as to which conditions of the financing agreement were not met by the management or any reasons for non-financing,” said Ms Gathungu.
The audit also flags failure by the government to follow up on beneficiaries of the scholarships due to a lack of a budget to monitor the programme, noting that it has provided information on 190 students for audit, out of the 805.
The government started the Wings to Fly project in August 2022, aiming to expand access to TVET education among vulnerable and deserving youth through scholarships.
The 805 youth are expected to benefit from financial support, scholarships, mentorship, and skills development opportunities to enhance employability and self-reliance, through the programme that ends in December.
“The project builds on the success of the Wings to Fly Scholarship Programme, which has supported thousands of bright but financially disadvantaged students to access secondary education since 2010,” the project management says.
In the scholarship programme for 315 secondary school students, Ms Gathungu also faults the State for fully relying on the EGF to identify and pick beneficiaries, its failure to provide a status report of the beneficiaries, and to provide counterpart funding.
By the end of June last year, Sh231.4 million (about 55 percent of the project funding), remained undrawn from the KfW Development Bank.
The scholarship programme started in March 2021 and runs until December 2026, targeting poor and vulnerable learners transitioning to secondary schools with scholarships and mentorship initiatives.
“The project achieved a budget absorption rate of 44 percent against the approved budget of Sh120 million set for the financial year ended 30 June 2025. The Expenditure incurred for the year was Sh52,983,793,” a report on the project management said.
The Sh52.9 million spent on the project in the last fiscal year was, however, a drop from the Sh149.7 million spent in the year ending June 2024.
