Kenya Railways Corporation accounts for KSh 547,378 million of the Government’s KSh 1,044,081 million portfolio of on-lent and direct loans to state corporations at the end of June 2026. The report puts its share at about 53 per cent.
The report recommends closer follow-up of repayment obligations, timely engagement with beneficiary entities and, where necessary, appropriate debt restructuring or recovery measures.
- The National Treasury’s Annual Public Debt Management Report for 2025/2026 sets out the position of Kenya Railways Corporation’s government loans at 30 June 2026.
- The corporation’s outstanding loan balance was KSh 547,378 million at the end of June 2026, unchanged from June 2025.
- Government on-lent and direct loans to state corporations totalled KSh 1,044,081 million, against KSh 1,051,177 million a year earlier.
- The report puts the corporation’s share of that portfolio at about 53 per cent.
- Loan arrears on the portfolio were KSh 568,907 million, of which KSh 473,167 million relates to Kenya Railways Corporation.
- The report recommends stronger loan recovery and monitoring, with restructuring or recovery measures where necessary.
The National Treasury’s Annual Public Debt Management Report for 2025/2026 identifies the concentration of government on-lent and direct loans in Kenya Railways Corporation as a significant fiscal risk. The corporation’s outstanding loan balance was KSh 547,378 million at the end of June 2026, unchanged from June 2025 and equal to about 53 per cent of the portfolio, up from about 52 per cent a year earlier.
The report puts the stock of on-lent and direct loans to state corporations at KSh 1,044,081 million at the end of June 2026, compared with KSh 1,051,177 million a year earlier, a fall of KSh 7,096 million, or 1 per cent. It attributes the reduction to repayments and Cabinet-approved loan write-offs that together exceeded new disbursements during the 2025/2026 financial year. With the railway balance unchanged, the corporation’s share of the portfolio rose as the total fell.
The report says the risk arises from the non-servicing of a substantial part of the portfolio by a single state corporation. Cumulative repayments across the portfolio rose from KSh 76,932 million to KSh 92,159 million, an increase of 19.8 per cent, and the repayment rate improved from about 6.8 per cent to 8.0 per cent. The report adds that repayments remain low relative to the overall portfolio, which it says points to continued challenges in loan recovery and debt servicing.
On arrears, the report states that loan arrears on on-lent and direct loans, comprising principal and accrued interest, amounted to KSh 568,907 million at the end of June 2026. Of that total, KSh 473,167 million relates to Kenya Railways Corporation, made up of KSh 322,533 million in principal and KSh 150,635 million in interest, about 84 per cent of all loan arrears. The report describes this as a significant concentration of government recovery risk in a single borrower and infrastructure project.
The report says loan recovery and monitoring mechanisms need to be strengthened, including closer follow-up of repayment obligations and timely engagement with beneficiary entities, together with appropriate debt restructuring or recovery measures where necessary.
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