Parliamentary scrutiny has revealed the reduced funding target, with the National Assembly Committee on Transport noting the change while also pointing out that no clear timelines have been provided for the bond issuance.
The Budget and Appropriation Committee, in a report reviewing the final 2026-27 budget estimates, said the process of securitising the Road Maintenance Levy Fund has already started.
“The committee noted that the securitisation process supported by the Sh5 per litre from the fuel levy has commenced,” the Budget and Appropriation Committee observed, referencing submissions by its Transport counterpart, in a report considering the final 2026-27 budget estimates. “Once the bond is floated, it is expected to mobilise approximately Sh120 billion.”
However, the committees did not give any clear schedule for when the bond will be introduced to the market. The National Treasury has also not provided a timeline in response to recent enquiries. President William Ruto, speaking in March, indicated that the government intended to list the bond at the Nairobi Securities Exchange, allowing public participation in the purchase and trading of the securities.
The Kenya Roads Board had earlier planned to mobilise Sh175 billion through the bond by the first quarter of 2026. The money was meant to repay commercial bank loans that were taken as a bridge facility to help clear pending bills owed to road contractors.
Originally, the plan involved raising funds from investment groups, but this approach has since shifted as the government focuses on a broader market-based issuance.
The bond proceeds are expected to settle part of an estimated Sh175 billion in bank loans used to clear historical road sector arrears up to December 2024.
Investors in the bond will be repaid using funds drawn from the Road Maintenance Levy Fund, where Sh7 of every Sh25 collected from petrol and diesel sales is set aside.
“In the course of this year, we will be bringing to the market the road maintenance levy fund securitisation bond, which has enabled us to settle the pending bills crisis that had stalled road projects everywhere in Kenya,” President Ruto said in March.
“The RMLF has raised for us Sh175 billion, and we will be bringing it here (to the Nairobi Securities Exchange) so people can trade it as well.”
Despite this statement, no specific issuance date was provided by the President, adding to the uncertainty surrounding the timing of the bond.
Four commercial banks, including Trade and Development Bank, KCB Bank Kenya, Absa Bank Kenya and UBA Kenya Bank, provided financing to clear arrears owed to contractors before the bond is floated.
The initial design of the programme included two separate bond issuances. The first was expected to raise Sh175 billion, while a second bond under consideration would raise Sh125 billion to cater for future arrears in the roads sector.
The Cabinet approved allocation of Sh12 from the Road Maintenance Levy Fund per litre of petrol or diesel to support repayment obligations for investors in the two planned bonds.
Clearing of the pending bills has already had an impact on the construction sector, with contractors returning to stalled projects and activity picking up across the country.
Data from the Kenya National Bureau of Statistics shows the construction industry grew by 6.8 percent in 2025 after contracting by 0.7 percent in 2024. Cement consumption rose by 20.3 percent to 10,300 tonnes.
“The length of paved roads stood at 25,400 kilometres in 2025, while residential housing units completed by the State Department for Housing and Urban Development more than quadrupled, from 1,655 units in 2024 to 6,738 units in 2025,” the KNBS said in its 2026 Economic Survey report.
Lawmakers have raised concern over the growing use of securitisation, pushing for stronger oversight powers to track how government revenues are being ring-fenced for borrowing.
The Public Debt and Privatisation Committee has warned that increased reliance on such financing models could expose the country to hidden fiscal risks and reduce transparency in public borrowing, especially when compared to conventional external debt.
The International Monetary Fund has also pushed for securitisation proceeds to be recorded within the broader public debt framework, arguing it would give a clearer picture of Kenya’s total obligations.
The stock of national government pending bills stood at Sh471.7 billion in March 2026, slightly higher than Sh468.5 billion recorded in December 2025.
Looking ahead, Kenya is also planning to securitise the annual Sh32 billion Railway Development Levy Fund to help finance expansion of the standard gauge railway from Naivasha to Kisumu and further to Malaba at the border with Uganda.