Kenya secures Sh77.8 billion in short-term financing for roads

The cash goes straight to the roads board, which conducts maintenance of roads on behalf of the government. Ruto's government has also turned to China to secure more funds for a major highway expansion project.
Kenya has received $600 million (Sh77.8 billion) in short-term financing from commercial banks, backed by the country's fuel levy collections from motorists, the finance minister said on Wednesday, to fund construction of roads in the face of budgetary constraints.
The East African nation has been struggling to fund development projects due to slower growth in revenue from taxes, high debt repayments and an increase in expenditure demands including from its 47 local authorities.
More To Read
- Traffic chaos in Mombasa after KeNHA closed Makupa–Changamwe section for road works
- President Ruto vows to crack down on SHA fraud as 1,000 health facilities shut
- President Ruto bestows Prince Rahim Aga Khan V 'Chief of the Order of the Golden Heart'
- Mbadi urges State agencies to prioritise PPPs in project planning
- Ruto appoints Faith Odhiambo to co-chair panel of experts on compensation of protest victims
- Kenya eyes TDB loan to clear Sh51.6 billion debt due September
President William Ruto's government, which took office in September 2022, has been trying to secure funds to finish road construction across the country.
The latest initiative involves the securitisation of the road maintenance levy, which is set at 18.00 shillings ($0.1392) per litre of fuel at the pump, allowing the Kenya Roads Board to access the bank financing at cheaper rates.
"They have received a funding of about $600 million," Finance Minister John Mbadi told Reuters.
Kenya is still seeking a bigger transaction that could take the form of a privately placed bond or a syndicated loan, for a maximum of $1.5 billion, he said.
The short-term funding, pending the bigger financial deal, will be used to pay off contractors for urgent road works.
The cash goes straight to the roads board, which conducts maintenance of roads on behalf of the government. Ruto's government has also turned to China to secure more funds for a major highway expansion project.
Top Stories Today