NAIROBI, Kenya, July 16 – Kenya has turned to an progressive financing technique to lift Sh175 billion and revive greater than 580 stalled highway initiatives throughout the nation.
In an announcement on Wednesday, Cabinet Secretary for Roads and Transport Davis Chirchir stated the federal government is utilizing a portion of the gas levy collected by the Kenya Roads Board to unlock funds owed to contractors with out taking up new debt.
The plan includes securitising Sh7 of the Sh25 per litre gas levy.
These funds, earmarked for highway upkeep, will now be channelled by a Special Purpose Vehicle (SPV), which is able to elevate upfront money to repay verified pending payments.
The remainder of the gas levy will proceed to assist ongoing upkeep work as normal.
“This isn’t a mortgage. We’re not growing Kenya’s debt,” stated Chirchir.
“We are utilizing a sustainable mannequin that enables us to clear what we discovered once we got here into workplace and get stalled initiatives transferring once more.”
The CS famous that when the Kenya Kwanza authorities assumed workplace, it inherited a big backlog of unpaid payments within the roads sector, commitments made by the earlier administration that led to the suspension of initiatives and money circulation issues for contractors.
According to Chirchir, the securitisation course of went by all of the required authorized channels, together with scrutiny and approval by the National Treasury and the Office of the Attorney General.
“There’s nothing secret about this,” he added. “We’re prepared to interact with Parliament, the media, and the general public to elucidate how the method works and what advantages it brings.”
The authorities hopes the transfer will restore confidence within the roads sector, spur financial exercise, and ship much-needed infrastructure to communities which have waited years for roads to be accomplished.
