Kenya has committed almost half of the levy motorists pay on every litre of petrol and diesel to repaying investors. The government expects the securitisation programme to raise about 300 billion shillings ($2.3 billion) to settle road contractor arrears and finance ongoing works.
The Kenya Roads Board has sold the rights to 12 shillings of the 25-shilling Road Maintenance Levy to a special purpose vehicle, Oak Assetco SPV Ltd. The company raises money from banks and investors against future levy collections. Road agencies now have direct access to about 13 shillings ($0.10) a litre for the life of the arrangement, which runs for about a decade.
The structure allows the state to raise cash without recording it as public borrowing. The National Treasury describes the transaction as a sale of future revenue. The IMF has urged Kenya to classify such securitised revenue as debt.
How it works
The Kenya Revenue Authority collects the levy and pays it into the Road Maintenance Levy Fund, which the roads board distributes to agencies for maintenance and repairs. Under the securitisation, the pledged share of collections goes to Oak Assetco before the rest reaches road agencies, and investors are repaid from that stream.
The first tranche, backed by 7 shillings a litre, was set at 175 billion shillings ($1.35 billion). The roads board has said it secured about 174 billion shillings in upfront financing for that tranche, with the Eastern and Southern African Trade and Development Bank as arranger.
The Cabinet approved a second tranche backed by a further 5 shillings a litre in November 2025. It targets 120 billion to 125 billion shillings ($924 million to $963 million), disbursed over two years to support ongoing works, according to the Cabinet and a National Assembly committee report.
Motorists’ pump price is unchanged by the securitisation. The levy rose to 25 shillings from 18 shillings in July 2024 under a separate decision.
Where the money goes
The Kenya Revenue Authority collected a record 119.7 billion shillings ($922 million) through the levy in the year to June 2025. The authority attributed the increase to the higher rate and a 13% rise in oil volumes. At that level, the 12-shilling share is equivalent to about 57.5 billion shillings ($443 million) a year, according to Sable calculations.
The Ministry of Roads and Transport said the funds have paid verified contractor arrears and revived more than 580 stalled road projects. The Kenya Rural Roads Authority’s pending bills and penalties fell to 28.5 billion shillings ($220 million) in March 2026, from 50.6 billion shillings ($390 million) in June 2025, according to the Controller of Budget.
Debt dispute
Kenya’s official definition of public debt covers loans and government securities. The Treasury keeps securitised revenue outside that measure.
The IMF has said securitised future revenue should be treated either as a loan to the securitisation vehicle or as direct government borrowing. It put the amount Kenya has raised this way at about 335 billion shillings ($2.58 billion) across several funds. The World Bank has included securitised flows in its own assessment of Kenya’s debt stock.
Risks
The repayment stream depends on a single source: fuel consumption. Demand is rising. The Energy and Petroleum Regulatory Authority reported a 6.94% increase in domestic petroleum demand in the year to June 2025, and further growth in petrol and diesel consumption in the second half of that year.
Over a ten-year horizon, collections could still be weakened by an economic slowdown, collection leakage, a change to the levy or a shift to electric vehicles. Sharp price increases could also cut consumption: in its April 2026 review, the regulator raised petrol by 28.69 shillings and diesel by 40.30 shillings a litre. The roads board has commissioned a study on how electric mobility could affect the fund.
The commitment also limits future budget flexibility and places road agencies and counties behind investors for the pledged share of collections. The all-in cost of the financing, including coupons and fees, has not been published.
The model is extending beyond roads. The government created a Railway Development Levy Fund in March 2026 to support similar financing. Treasury officials have told lawmakers they are considering securitising other funds, including the Higher Education Loans Board and the Hustler Fund.
What to watch
The roads board plans to issue longer-term notes to refinance the bridge loans used to pay contractors. Their pricing against Treasury bonds will show how investors value a pledged Kenyan levy. The pace of disbursements under the second tranche will show whether it funds ongoing works over the two years the Cabinet set.
The IMF’s recommendation on debt classification will feature in Kenya’s continuing talks with the Fund, and reclassification would raise the country’s reported debt. The roads board’s electric mobility study and the terms of any railway levy securitisation will show how far the government intends to extend the model.