The National Treasury is looking to local banks to finance the much-hyped annuity roads programme as foreign institutions shy away, citing a high level of risk.
Through the programme, the Government had planned to build 10,000 kilometres of roads over a three-year period, but faced challenges due to its nature.
A contractor has to design, finance and construct a road. The initiative was shelved in 2016 but was revived the following year.
The award of a contract for the construction of the Ngong-Kiserian-Isinya road has emboldened the Government on the programme’s feasibility.
The road is being constructed by Intex Raf Construction Company at a cost of Sh8 billion and financed by KCB Group.
Director-General Public Investments and Portfolio Management at Treasury Stanley Kamau said yesterday the Government would in the future increasingly look to local banks to finance the programme.
“Foreigners appear to be averse because they perceive this model of lending for Kenya as risky,” he said at a forum hosted by the Institute of Certified Investments and Financial Analysts on investments in infrastructure in Nairobi.