Cabinet Secretary for the National Treasury John Mbadi before the National Assembly's Education committee chaired by Eve Obara to consider budget implementation in the education sector and also to respond to statements sought by Members in the House at Mini- Chamber, County Hall. July 24th,2025. [Elvis Ogina, Standard]
Sh12 trillion debt: State borrows Sh95.5b in five months
Politics
By
Irene Githinji and Josphat Thiong'o
| Oct 09, 2025
The Kenya Kwanza government's borrowing trends continue with the latest documents revealing how some Sh95.5 billion was borrowed in five months alone.
This comes against growing concerns on public debt estimated at Sh12 trillion, with the four new loans translating to about Sh23.8 billion per month between May and August this year.
Documents from the National Treasury tabled in the National Assembly showed the loans include the Integrated Natural Resources Management Programme. The documents further show the loan was signed on June 23 between the International Fund for Agricultural Development as the lender and the Government of Kenya as the borrower.
The amount of the loan is USD126,800,000, or approximately equivalent to Sh16.38 billion and will be repaid in US dollars. “The report on new loans is prepared in accordance with section 31 (3) of the Public Finance Management Act, 2012 and covers the period from May 1, 2025, to August 31, 2025. One loan facility and one bond issuance from the previous period are reflected in the current report, having been recorded in the Commonwealth Meridian system after the close of the reporting period,” the report tabled in the National Assembly on October states.
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The loan is to be repaid in 40 equal semi-annual repayments of USD 3,170,000 from June 15, 2030, through to December 15, 2049. “The interest rate of the loan is 1.41 per cent, service charge of 1.39 per cent will be fixed for the life cycle of the loan and payable semi-annually. The purpose is to enhance integrated natural resources management, increase resilience to climate change and improve beneficiaries' livelihoods, particularly for women, youth, and other vulnerable groups,” the documents read.
The National Cabinet Secretary is expected to specify names of the parties to the loan; the amount of the loan and the currency in which it is expressed and in which it is repayable, terms and conditions of the loan, including interest and other charges payable and the terms of repayment, amount of the loan advanced at the time the report is submitted and the purpose for which the loan was used and the perceived benefits of the loan.
The second loan facility is the MW Gogo Hydropower Plant Redevelopment Project-(Renewable Energy Enhancement Facility (REEF) II), signed on August 19, 2025, between the Government of the Federal Republic of Germany as the lender and the Government of Kenya as the borrower.
The amount of the loan is EUR 35,000,000( approximately Sh5.3 billion), which is to be repaid in euros. “The loan will be repaid in 20 equal instalments of EUR 1,666,666.66 from May 15, 2030, through to November 15, 2039 and the last 1 instalment of EUR 1,666,666.80 on May 15, 2040. The interest on the loan is at a rate of 2.98 per cent per annum (Fixed Interest Rate) on the disbursed loan amount. The commitment fee is 0.25 per cent per annum on undisbursed loan amounts. Additionally, the loan attracts a non-refundable one-time lump-sum management fee of 0.5 per cent of the loan,” the report states.
The third facility is the international sovereign bond, having been issued on April 30, 2025, between the Citi Group Global Markets Europe AG as the lender and the Government of Kenya as the borrower, amounting to USD 500,000,000, equivalent to Sh64.6 billion and will be repaid in US dollars.
The loan will be repaid in two equal instalments of USD 250,000,000 on April 30, 2030 (the First Amortisation Date) and on April 30, 2032 (the maturity date), with the interest rate being 8.25 per cent per annum of the outstanding principal amount of the notes.
“The purpose of the loan is to carry out liability management operations and support the budget,” the National Treasury documents state.
The fourth facility is on the economic inclusion and green recovery support program.
The loan was signed on April 22, 2025, between the Organisation of Petroleum Exporting Countries as the lender and the Kenyan Government as the borrower.
The amount of the loan is EUR 60,000,000 approximately Sh9.2 billion, and will be repaid in euros.
The loan will be repaid in 40 equal instalments of EUR 1,500,000 from May 15, 2030, to November 15, 2049. The interest rate is 6 months Euro Interbank Offered Rate (Euribor) plus a margin of 1.55 per cent per annum on amounts withdrawn and outstanding.
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