NAIROBI, April 23 (Xinhua) -- The World Bank has unlocked 338 million U.S. dollars withheld due to perceived laxity in the war against official corruption in Kenya, further increasing the east African nation's chance of receiving bilateral aid pledges, officials said here Monday.

    Addressing a news conference in Nairobi, Finance Minister Amos Kimunya also said the International Monetary Fund (IMF) has cleared Kenya to receive the second round of poverty and economic restructuring funding.

    Kenyan Finance Minister Amos Kimunya said here Monday the IMF clearance for the second round of the Poverty Reduction and Growth Facility (PRGF) makes it only the second time in a decade that Kenya has completed the second phase.

    The IMF approval is a big confidence boost to the Kenyan authorities, whose sources of direct budgetary support has been opened after nearly four years.

    IMF released the first phase of the 276 million dollars PRGF funding in 2003 and completed the funding around two weeks ago with the release of the final phase of 56 million dollars. The third phase of the program is expected to begin soon, Kimunya said.

    The European Union (EU) has also taken the IMF cue to release about 50 million dollars for direct budget support, boosting Kenya' s international reserves to historically high figures. Kenya's Central Bank (CBK) says it currently has 2.5 billion dollars in its reserves.

    Kimunya attributed the release of the withheld funding to "goode conomic performance" over the past four years and the steady increase in per capita income, which he said would result in significant progress in efforts to reduce poverty in Kenya.

    The World Bank withdrew its support for the six projects it was due to finance over the last few years after government officials were implicated in a financial scam involving an alleged plan to purchase a tamper-proof passport-issuing machine.

    Kimunya said the efforts to enhance economic efficiency, including the privatization of key state-run companies, streamlining of the budget and public expenditure and the streamlining of business licensing procedures were convincing to donors.

    The World Bank funds will be spent mainly on projects aimed at enhancing water management, including forest conservation to save the country's water catchments areas. Others are aimed at reducing the impact of floods and initiatives to enhance education.