The government is using a portion of the fuel levy collected through the Kenya Roads Board to unlock funds owed to contractors without taking on new debt.
This is according to Cabinet Secretary for Roads and Transport Davis Chirchir, who revealed on Wednesday that the Ruto administration has turned to an innovative financing method to raise Sh175 billion and revive more than 580 stalled road projects across the country.
The government is using a portion of the fuel levy collected through the Kenya Roads Board to unlock funds owed to contractors without taking on new debt. This plan involves securitising Sh7 of the Sh25 per litre fuel levy.
These funds, earmarked for road maintenance, will now be channelled through a Special Purpose Vehicle (SPV), which will raise upfront cash to pay off verified pending bills.
The rest of the fuel levy will continue to support ongoing maintenance work as usual.
“This isn’t a loan. We’re not increasing Kenya’s debt. We are using a sustainable model that allows us to clear what we found when we came into office and get stalled projects moving again,” CS Chirchir said.
According to the CS, when the Kenya Kwanza government assumed office, it inherited a significant backlog of unpaid bills in the roads sector, commitments made by the previous administration that led to the suspension of projects and cash flow problems for contractors.
He further noted that the securitisation process went through all the required legal channels, including scrutiny and approval by the National Treasury and the Office of the Attorney General.
“There’s nothing secret about this,” he added. “We’re ready to engage with Parliament, the media, and the public to explain how the process works and what benefits it brings.”
The government hopes the move will restore confidence in the roads sector, spur economic activity, and deliver much-needed infrastructure to communities that have waited years for roads to be completed.
