Kenya to Borrow Sh81 Billion for JKIA Expansion Under New Financing Plan

Kenya will borrow Sh81 billion for the expansion of Jomo Kenyatta International Airport, dropping an earlier plan to fund the project entirely through a bond. The loan will cover 70 percent of the Sh116 billion cost, with the balance raised through a securitised bond backed by the air passenger service levy and contributions from the National Infrastructure Fund.

The revised financing approach was outlined by Roads and Transport Cabinet Secretary Davies Chirchir. The project aims to nearly triple JKIA’s annual passenger handling capacity to 22 million from the current 7.5 million. It involves rehabilitation of existing facilities and construction of a new terminal. Plans for a second runway have been deferred.

The government contracted Africa’s Trade and Development Bank and Africa Finance Corporation to arrange the financing. China Road and Bridge Company has been tapped for construction. The overall cost has been reduced from an initial Sh155 billion estimate.

Earlier plans involving India’s Adani Group were cancelled following the founder’s indictment in the United States. The current model relies on a combination of debt, levy-backed securities, and the new infrastructure fund. Projected revenue from the air passenger service levy will back the bond portion.

JKIA remains Kenya’s primary international gateway. Expansion is critical to maintaining the country’s position as a regional aviation hub amid competition from Ethiopia and Rwanda. Improved facilities should attract more airlines and passengers, boosting tourism and business travel.

The financing mix reflects Kenya’s strategy to leverage future revenue streams for infrastructure while managing current fiscal constraints. Securitisation allows the government to tap private capital without immediate heavy borrowing. The National Infrastructure Fund is expected to play a growing role in major projects.

For the construction sector, the JKIA upgrade represents a significant opportunity. Works will involve terminal buildings, aprons, and supporting infrastructure. Local content requirements could create jobs and business for Kenyan firms.

The project has faced delays but remains a priority. Successful execution could serve as a model for other public infrastructure initiatives using blended financing.