Govt Clarifies KSh175B Roads Bond Deal and Its Link to Ksh7 Fuel Levy

Cabinet Secretary for Transport and Infrastructure Davis Chirchir has defended the KSh 175 billion roads bond deal, assuring that it poses no risk to public debt. CS Chirchir told the National Assembly’s Budget and Appropriations Committee that the transaction is part of a long-term financing arrangement with the Trade and Development Bank (TDB).

According to the CS, the State Department for Roads allocated KShs 7 from the Road Maintenance Levy Fund (RMLF) to a Special Purpose Vehicle (SPV) to facilitate the bond facility in February 2025.

The funds were used to settle pending bills and financial obligations of the department. He emphasised that the government did not issue any sovereign guarantee for the transaction.

“No guarantee has been issued by the Government of Kenya for this transaction. The risks rest with the purchaser of the receivables, the SPV. This does not sit in government books and has no implication on public debt ceilings,” CS Chirchir said.

RMLF Allocation to Counties Reviewed by CS Chirchir

During the session, chaired by Samuel Atandi (Alego Usonga), CS Chirchir also addressed concerns over the Road Maintenance Levy Fund and its allocation to counties.

He noted that the proposed KShs 13.115 billion conditional grants for counties in the 2025/26 financial year exceed projected allocations.

According to historical distribution, counties receive 15% of the RMLF, which would amount to KShs 12.353 billion this financial year.

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The Cabinet Secretary stressed that the Printed Estimates for FY 2025/26 have made no provisions for additional RMLF allocations to counties.

Urgent Bills and Legislative Support

CS Chirchir urged Parliament to fast-track the Kenya Roads (Amendment) Bill, 2025. He said the legislation is critical for clarifying road classifications, defining responsibilities between national and county governments, and guiding the allocation of resources.

The Budget and Appropriations Committee has concluded its stakeholder engagements for the week and is finalising reports on the FY 2024/25 Budget Implementation.

These include the County Governments Additional Allocation Bill 2025 and the Equalisation Appropriation Bill, which are expected to be tabled once the National Assembly resumes from recess.

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“The roads bond is structured to protect public finances. It does not increase Kenya’s debt burden and will support critical infrastructure projects without affecting fiscal sustainability,” CS Chirchir added.

The government maintains that the KSh175 billion bond is a strategic move to settle pending obligations and enhance infrastructure development while ensuring fiscal discipline.

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