The government is set to borrow billions of shillings by securitising an additional Ksh5 per litre from the existing fuel levy to revive stalled road projects across the country. Transport Cabinet Secretary Davis Chirchir revealed the plan while appearing before the National Assembly’s Transport and Infrastructure Committee on Wednesday.
Chirchir said the move aims to address the growing cash crunch that has slowed down road construction and delayed payments to contractors. The proposed measure will increase the total portion of the fuel levy tied to borrowing from Ksh7 to Ksh12 per litre. This will allow the state to access funds upfront and repay the loans using future fuel levy collections.
“The government intends to securitise another Ksh5 per litre of fuel to boost road construction, building on the success of the earlier Ksh7 per litre securitisation programme,” Chirchir told lawmakers.
Under the securitisation model, part of the fuel levy serves as collateral for loans or bonds issued through the Kenya Roads Board (KRB). This approach enables the government to unlock billions instantly rather than relying solely on annual allocations.
To create the extra Ksh5 per litre borrowing capacity, the Ministry plans to redirect funds from the Roads Annuity Fund, the Emergency Roads allocation, and the share assigned to Fuel Levy Agents. The funds will go toward settling pending bills and restarting critical road projects that have stalled nationwide.
Chirchir noted that the initial Ksh7 per litre securitisation raised Ksh175 billion, with Ksh104 billion already disbursed to pay contractors. However, the ministry still faces a financing gap of about Ksh890 billion for ongoing contracted works.
The Transport CS urged Parliament to approve the additional securitisation plan, terming it vital to bridging the funding gap and ensuring the resumption of construction across Kenya’s transport network. Committee chairperson George Kariuki is expected to table a detailed report on the proposal for parliamentary review.
