Roads and Transport Cabinet Secretary Davis Chirchir has defended the government’s controversial Ksh175 billion road infrastructure bond, insisting it will not add to Kenya’s already ballooning Ksh11 trillion public debt.
Appearing before the National Assembly’s Budget and Appropriations Committee on Friday, September 5, Chirchir explained that the financing was structured through a Special Purpose Vehicle (SPV) backed by future revenues from the Road Maintenance Levy Fund (RMLF).
According to Chirchir, Ksh7 from the RMLF is allocated directly to the SPV, which then uses these receivables as collateral to secure funding from the Trade and Development Bank (TDB). “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,” said Chirchir.
The CS emphasized that because the loan sits on the books of the SPV and not the government, it does not qualify as public debt. He described the arrangement as “bankruptcy-remote” from the state, meaning it has no impact on the national debt ceiling or fiscal sustainability.
Kenya’s debt currently stands at over Ksh11 trillion, with Ksh5 trillion in domestic obligations and Ksh5.09 trillion in external debt. This represents about 63 percent of GDP, significantly above the 55 percent threshold recommended for fiscal stability.
The bond proceeds will be directed towards settling pending bills at the State Department for Roads and financing critical infrastructure projects. A large portion will fund the expansion of the Nairobi-Nakuru-Mau Summit Highway, a key section of the Northern Corridor that links Nairobi to western Kenya and regional markets in Uganda, Rwanda, South Sudan, Burundi, and eastern DRC.
Construction of the highway is expected to begin in August 2025 and take 24 months, with completion targeted for June 2027. Once finished, the project is expected to ease chronic traffic congestion along one of Kenya’s busiest transport routes, especially during weekends and national holidays.
