• UBA pledges $150 mln to Kenya’s $1.35 bln road tax securitization scheme

• Initiative aims to clear arrears and restart stalled road projects

• Analysts warn fuel levy-backed plan could raise living costs through inflation

United Bank for Africa (UBA) has committed $150 million to Kenya’s road tax securitization program worth $1.35 billion. The scheme, led by the Kenya Roads Board (KRB), is designed to clear payment arrears in road construction and restart stalled projects. It is backed by the country’s fuel levy.

The initiative is part of the government’s effort to diversify infrastructure financing amid budget pressures. Nairobi’s 2023–2027 strategic plan includes the construction of an additional 6,000 km of roads. Expanding and modernizing the road network is seen as key to boosting domestic trade, lowering logistics costs, and improving national competitiveness.

While securitization offers quick liquidity from investors, analysts caution it could impact the cost of living. Fuel distributors may pass on the levy to consumers, potentially driving up transport costs, food prices, manufactured goods, and industrial inputs, adding to inflationary pressure in an already tight economy.

The transaction also highlights the growing role of pan-African banks in funding major infrastructure. In Gabon, BGFI Bank is financing several large-scale road projects. By investing in debt tied to public revenue, UBA signals its intent to support governments in finding innovative financing solutions at a time of high debt levels and fewer concessional funding options.