Kenya to Borrow $969 Million for Road Projects, Plans Fuel Levy to Repay Debt. Nairobi, Kenya — Kenya is set to borrow $969 million to fund critical road projects, with the government planning to repay the debt through a fuel levy, according to official statements.
The short — term borrowing is intended to clear existing road sector arrears and fund new initiatives, officials.
The government aims to swap the short — term debt into a longer-term bond, to be serviced using proceeds from a fuel levy set at seven Kenyan shillings per liter, Bloomberg reported.
In a bid to alleviate fiscal pressures and reduce direct government borrowing, the government has also approved a roughly Sh104 billion bridge facility and aims to issue a Sh175 billion roads bond as take-out financing, AInvest reported.
Additionally, Kenya plans to establish a National Infrastructure Fund to finance a 10,000-km road expansion, leveraging privatization, public-private partnerships (PPPs), and private capital.
Kenya has been addressing a high public debt burden and road sector arrears, which have constrained infrastructure development.
The government’s strategy, as outlined, appears to be part of a broader shift towards infrastructure funds and PPPs to mitigate reliance on sovereign borrowing. Government officials framed the move as a strategic approach to quickly fund roads and clear arrears, with a defined repayment source from fuel levy proceeds.
However, independent observers highlighted the need for swift bond issuance and the mobilization of private investment through the National Infrastructure Fund to ensure the success of the plan and avoid persistent debt pressures. Further details are expected as the government proceeds with the bond issuance and infrastructure fund establishment.
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Source: Africa.
*Additional reporting by ImNews | Sources consulted: 5*
