In a bold financial reform set to reshape infrastructure development in Kenya, the government has launched a groundbreaking road funding strategy that aims to clear pending bills and restart hundreds of stalled projects, without imposing new taxes or increasing national debt.
Cabinet Secretary for Roads and Transport, Davis Chirchir, announced that KSh 175 billion has been raised through the securitization of the Road Maintenance Levy Fund (RMLF), a first-of-its-kind initiative in Kenya. The Kenya Roads Board (KRB), operating under the Ministry of Roads and Transport, has directed KSh 7 out of every KSh 25 collected from the RMLF into a Special Purpose Vehicle (SPV), unlocking immediate funds to address pressing infrastructure needs.
“This is a turning point in how we fund our roads. By utilizing future cash flows instead of borrowing or drawing from the Exchequer, we relieve pressure on the 2025/26 budget and protect taxpayers from new financial burdens,” said CS Chirchir.
The funds will be used to pay off verified contractor arrears and revive over 580 stalled road projects across the country, a move expected to generate jobs and stimulate economic growth. Previously, such financing needs would have required over KSh 100 billion from the National Treasury—resources that can now be reallocated to essential services like health, education, and debt management.
Chirchir emphasized that the model does not affect Kenya’s debt sustainability, as it avoids sovereign borrowing and leverages predictable revenue from fuel levies. The approach has been rated low-risk by investors and remains off the books of public debt statistics.
“This solution ensures continuity in infrastructure development without passing the cost to the public,” Chirchir added. “It’s a fiscally responsible way to accelerate national development.”
With this model in place, KRB is expected to lead future infrastructure financing using similar sustainable, off-budget approaches, marking a significant shift in Kenya’s public investment strategy.
Written By Rodney Mbua
