The Cabinet has approved US$350 million (approximately KSh45.4 billion) in shareholder financing for Kenya Airways as the national carrier seeks to stabilize its finances and return grounded aircraft to service.
The approval was made on Friday, October 9, 2026, after a Cabinet meeting at State House, paving the way for new funding to support the airline’s turnaround efforts and address urgent financial obligations.
According to a cabinet dispatch, the funds are expected to cover critical expenses, including aircraft maintenance and the work required to return grounded planes to operation.
Cabinet Approves KSh45.4 Billion for Kenya Airways
The financing will be disbursed in tranches under the oversight of the National Treasury, with a repayment period of up to 10 years.
“To support the turnaround of national carrier Kenya Airways, Cabinet approved USD350 million in shareholder financing to meet urgent financial obligations, including aircraft maintenance and returning grounded planes to service.
“The funds will be disbursed in tranches under National Treasury oversight, with a repayment period of up to 10 years and the possibility of conversion into equity, subject to the necessary approvals.”
Also Read: Kenya Airways Cabin Crew: Salary Package, Qualifications and How to Join in 2026
Government Backs KSh122 Billion Debt Conversion
In a separate measure, the Cabinet endorsed a proposal to convert KSh122 billion in existing Government loans to Kenya Airways, together with accrued interest, into an equity-qualifying tradable instrument.
The proposed conversion is intended to strengthen the airline’s balance sheet and support future capital raising.
The move would change how the existing Government-backed debt is structured, potentially improving the airline’s financial position.
“The meeting also endorsed the proposed conversion of KSh122 billion in existing Government loans, plus accrued interest, into an equity-qualifying tradable instrument to strengthen the airline’s balance sheet and support future capital raising,” the dispatch read.
The two measures form part of the Government’s broader strategy to support Kenya Airways as it seeks to stabilize its operations and improve its long-term financial sustainability.
Also Read: Video Captures Final Moments of Passenger on Kenya Airways Flight Before Death
According to the Cabinet, Kenya Airways contributes more than US$1.3 billion annually to Kenya’s gross domestic product through tourism, trade and regional connectivity.
“The measures form part of Kenya Airways’ long-term turnaround plan and are intended to safeguard an airline that contributes more than USD1.3 billion annually to Kenya’s GDP through tourism, trade and regional connectivity,” it added.
However, implementation remains subject to the required corporate, shareholder and regulatory approvals.
Kenya Airways plays a role in connecting Kenya to regional and international markets, with its contribution to tourism and trade forming part of the economic considerations behind the proposed support.
Government Approves KSh23.74 Billion in Pending Bills
In a separate decision, the Cabinet approved the settlement of 28,726 verified Government pending bills worth KSh23.74 billion, offering relief to suppliers and contractors who have waited years to receive payment.
Some of the outstanding claims date back to 2005, leaving businesses waiting for money owed for goods and services supplied to Government entities.
The approved bills are each valued at KSh50 million or below and account for 98 per cent of the 29,257 claims recommended for settlement following a review by the Pending Bills Verification Committee.
The committee received 115,617 claims worth KSh664.8 billion. After reviewing the submissions, it recommended 29,257 claims valued at KSh155.34 billion for settlement.
The Cabinet’s approval covers 28,726 of those recommended claims, amounting to KSh23.74 billion.
The National Treasury will oversee the payments, with priority given to micro, small and medium enterprises (MSMEs). Particular consideration will be given to businesses owned by women, young people and persons with disabilities.
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