CS Chirchir defends Sh175 billion infrastructure bond, assures it won’t raise public debt
CS Davis Chirchir explained that the State Department for Roads allocated Sh7 billion from the Road Maintenance Levy Fund (RMLF) in February 2025 to a Special Purpose Vehicle (SPV).
Transport and Infrastructure Cabinet Secretary Davis Chirchir has defended the KSh175 billion infrastructure bond facility, assuring Parliament that it does not increase Kenya’s public debt.
Appearing before the National Assembly’s Budget and Appropriations Committee on Friday, Chirchir explained that the State Department for Roads allocated Sh7 billion from the Road Maintenance Levy Fund (RMLF) in February 2025 to a Special Purpose Vehicle (SPV).
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The transfer formed part of the arrangements to secure long-term financing from the Trade and Development Bank (TDB) aimed at settling outstanding bills and other financial commitments within the roads department.
The session, chaired by Alego Usonga MP Samuel Atandi, addressed several issues under the transport and infrastructure docket, with a particular focus on the management and allocation of the Road Maintenance Levy Fund, which has previously sparked debate between national and county governments.
“No guarantee has been issued by the Government of Kenya for this transaction. The risks associated with the transaction rest with the purchaser of the receivables, that is, the SPV. The transaction does not sit in the books of the government, but in a bankruptcy-remote SPV. Therefore, it has no implication on public debt ceilings and fiscal sustainability,” CS Chirchir said.
Chirchir also discussed the County Governments Additional Allocation Bill, 2025, pointing out that the proposed Sh13.115 billion conditional grant for counties in the 2025/26 financial year was above the projected allocation.
“This is because historically, counties have received 15% of the RMLF, and the projection for this financial year is Sh82.355 billion. Therefore, the funding should be Sh12.353 billion and not Sh13.115 billion. It should, however, be noted that the Printed Estimates for FY 2025/26 have made no provisions for RMLF allocations to county governments,” he clarified.
The CS urged Parliament to expedite the Kenya Roads (Amendment) Bill, 2025, stressing that it is essential to clearly define road classifications, assign responsibilities between national and county governments, and guide the equitable allocation of resources.
The Budget and Appropriations Committee concluded its stakeholder hearings for the week and is now preparing reports on the implementation of the 2024/25 Budget.
These include reviews of two Senate bills, the County Governments Additional Allocation Bill, 2025, and the Equalisation Appropriation Bill, 2025. The reports are expected to be tabled when Parliament resumes from recess.
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