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President of the World Bank Jim Yong Kim. Image courtesy of John Bompengo/MONUSCO.

International Finance Corporation (IFC), the private sector arm of the World Bank, has pledged $600 million that will partially be used to fund a pipeline running from Uganda to Kenya.

The funds are part of a larger $1.8 billion package the World Bank is giving out to spur economic growth and boost business activity in the Horn of Africa.

A consortium made up of the World Bank, the African Development Bank, the EU and the Islamic Development Bank will also fund the construction and improvement of oil and gas pipelines and transport links.

Oil producing nations in the Horn of Africa are also set to benefit from the aid packages.

The money will be distributed to eight countries including Sudan and South Sudan, major oil producers in the region.

Nations with emerging hydrocarbon industries such as Uganda and Kenya will also receive funds.

“A new World Bank Group paper forecasts that the Horn will undergo dramatic and lasting change when oil production starts in Kenya, Uganda, and possibly Somalia and Ethiopia,” the World Bank said.

The EU is also set to chip in about $3.7 billion in funding until to 2020.

The African Development Bank will match the World Bank’s $1.8 billion package and the Islamic Development Bank will give up to $1 billion to Sudan, Somalia, Djibouti and Uganda.