NAIROBI, KENYA – April 17, 2025
The Kenyan government has secured $600 million in short-term financing from a consortium of commercial banks to accelerate road construction projects across the country. The funding, arranged through the Kenya Roads Board (KRB), is backed by fuel levy collections, allowing the government to access the loan at more favorable interest rates despite ongoing fiscal pressures.
The move comes at a time when Kenya is grappling with sluggish tax revenue growth and mounting public debt, both of which have strained its ability to fund critical infrastructure. Officials say the injection of capital will help fast-track ongoing and stalled projects, particularly in underserved and rural areas.
“This financing will allow us to maintain momentum in road construction and rehabilitation without adding undue strain on the national budget,” said an official from the Ministry of Roads and Transport. “We’ve structured it carefully, leveraging a predictable revenue stream—the fuel levy—to ensure timely repayment.”
The Kenya Roads Board, responsible for overseeing the maintenance and development of road infrastructure, has been under pressure to address deteriorating roads and unmet transport needs amid competing government priorities. The fuel levy, collected at the pump from motorists, is seen as a reliable source of revenue to anchor such financing agreements.
Transport analysts welcomed the development, noting that improved road networks are crucial for boosting trade, connecting producers to markets, and stimulating economic growth in remote areas. However, they cautioned that transparency and accountability will be essential to ensure that the borrowed funds are used efficiently and not lost to mismanagement.
Kenya’s public debt currently exceeds 70% of GDP, prompting scrutiny over every new financing arrangement. Officials maintain that the structure of this particular deal, being short-term and backed by a dedicated revenue stream, is a lower-risk strategy to address immediate infrastructure gaps without resorting to longer-term borrowing from international lenders.
With the funds now secured, the government is expected to roll out an updated project list in the coming weeks, prioritizing regions with stalled construction and heavy transport congestion.