Kenya Secures Sh20bn Loan For Ailing National Carrier

The Government of Kenya has secured a Sh20 billion loan for the national carrier Kenya Airways. The loan will be used to repay a prior loan from the African export-Import Bank (Afrexim) from 2016.  

It is expected to cost Government at least Sh2 billion in interest and charges over the ten year period agreed, with a one-off upfront fee of 2.6 per cent and an annual agency fee of Sh1 million.

According to the Treasury the new loan will be repaid in 10 equal, semi-annual tranches between now and 2029. 

The national airline has been troubled for sometime and is undergoing an extensive restructuring process. A potential deal for the airline to takeover the operations of Kenya Airports Authority (KAA) continues to be examined as a potential solution to the firm’s problems. However it faces opposition from those who believe the deal would compromise the KAA.