State to issue Sh175bn roads bond in February
Proceeds will settle pending bills to contractors and repay loans from banks...
✨ Key Highlights
Kenya is set to issue a Sh175 billion securitised roads bond in February to clear outstanding debts to contractors and repay commercial bank loans. This move aims to alleviate the financial crunch on contractors and resume stalled road works across the country.
- The bond will be issued in tranches, with a preference for investment clubs, as the local market cannot accommodate a single issuance of Sh175 billion.
- Martin Agumbi, acting Director General of the Kenya Roads Board (KRB), stated the proceeds will fully settle loans taken to clear pending bills.
- Proceeds will repay loans from banks including Trade Development Bank, KCB Bank Kenya, UBA Bank Kenya, and Absa, which provided Sh174 billion to clear pending bills accumulated from 2005 to 2024.
- The bond is secured by the Road Maintenance Levy (RML) Fund, with Sh12 from every Sh25 collected per litre of fuel earmarked for repayment.
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Kenya to Issue Sh175bn Roads Bond and Plans Six Mega Dams - January 2026
The Kenyan government is set to issue a Sh175 billion securitised roads bond in February to clear outstanding debts to contractors and repay commercial bank loans. This move is intended to resume stalled road works across the country. Separately, the government plans to construct six mega dams starting in 2026. This project aims to expand irrigation to two million acres of farmland, boosting food security in arid and semi-arid lands (ASALs). In terms of existing fund distribution, the National Treasury reported that Nairobi, Turkana, and Nakuru counties have been the largest beneficiaries of the Sh4.04 trillion equitable revenue share since devolution began in FY 2013/14.
