Kenya secures $600 million in short-term financing for roads

Kenya Secures US$600 Million in Short-Term Financing to Support Road Construction
The government of Kenya announced on April 16 2025 that it has secured US$600 million in short-term commercial financing to support urgent road works across the country. The deal, backed by future fuel-levy revenues from motorists, was disclosed by Finance Minister John Mbadi as the nation faces tighter budget constraints amid slower tax growth and rising debt service costs.
Under the arrangement, the funds come via commercial banks and are secured by the road-maintenance levy of 18 Kenyan shillings per litre of fuel—the levy having been earmarked to allow access to cheaper financing for the Kenya Roads Board.
Kenya’s government, which took office in September 2022 under President William Ruto, has been seeking ways to keep development projects moving while under pressure from heavy debt repayments and slower revenue collection.
The financing will be directed toward paying contractors and supporting road maintenance work, rather than waiting for a larger borrowing deal that the government says could reach up to US$1.5 billion later in the year.
Analysts say the move underscores Kenya’s commitment to infrastructure, but also highlights the fiscal tightrope it is walking—balancing urgent investment needs with the burden of rising debt and constrained revenue.
Looking ahead, success will depend on how effectively the government uses the funds for road-upkeep and whether the broader borrowing strategy stays sustainable. If Kenya can execute the road projects efficiently and repays the short-term loan without crowding out other sectors, it may boost investor confidence. On the flip side, failure to manage the financing responsibly may deepen concerns about fiscal sustainability and dependency on external lenders.