The government has set a target to borrow Sh38.74 billion against the Sports Fund to complete the construction of 33 new and existing stadiums across the country.
The new facility will mark the second securitisation under the Sports, Arts and Social Development Fund (SASDF), after the Sh44.8 billion Talanta bond whose proceeds are in use in the construction of the 60,000-seater Raila Odinga Stadium in Nairobi.
The Sports Fund is already recruiting a transaction advisor and lead arranger to structure the new loan, which is expected to match the Talanta bond’s 15-year tenor.
“The fund is in the process of implementing a financing programme aimed at mobilising resources through a loan facility to finance the construction and completion of 33 new and ongoing stadia and related infrastructure across the country,” the Sports Fund said in a disclosure.
“The estimated amount to be sourced is the cumulated project contract price amounting to Sh38.74 billion (exclusive of the facility fee), for a proposed repayment period of 15 years. The proposal should aim at providing the facility in the shortest time period, preferably not exceeding 60 days upon award.”
The advisors will be required to identify funding sources, negotiate financing terms with the lenders or investors, structure financial models, and ensure sustainability throughout the life of the stadium projects.
The State has launched a series of stadium construction and expansion projects across the country, including in Mombasa, Kisumu, Nakuru and Eldoret, and more than 20 other counties.
It is also upgrading the Kasarani and Nyayo National Stadiums in Nairobi in readiness for the June 2027 Africa Cup of Nations tournament, which is being co-hosted by Kenya, Tanzania and Uganda.
Under the securitisation plan, the fund’s collections are used to pay interest and principal to lenders in the bond issuances, effectively allowing the government to borrow against future taxes.
The fund is mainly financed through taxes and levies raised from the betting industry, with Sh2.07 billion targeted per month.
In the year to June 2026, taxes on betting services rose 24.9 percent to Sh16.5 billion, against a target of Sh14.26 billion.
The overall funding for the SASDF in the 2026/2027 budget was set at Sh25.2 billion, part of a wider budgetary allocation of Sh45 billion to the Sports and Tourism Ministry. The Tourism Fund was allocated Sh14.3 billion.
The State has turned to securitisation of these future taxes and levies to finance large and costly public projects, including roads, as its room to borrow continues to shrink due to a ballooning of public debt to Sh13 trillion.
It is part of alternative financing plans that include public-private partnerships (PPPs) across the energy, transport, water, housing, health, and digital infrastructure sectors. In the current year, the government is targeting at least Sh70 billion in PPP investments.
Last year, the Treasury securitised Sh7 out of the Sh25 per litre collected under the Road Maintenance Levy Fund (RMLF) to service loans of Sh175 billion contracted to pay pending bills to road contractors.
The government is planning to leverage a further Sh5 per litre from the levy to secure another Sh125 billion in a new roads bond. The government increased the levy from Sh18 to Sh25 per litre in July 2024.
The Tourism ministry is meanwhile dipping into the Sh5 billion per year Tourism Levy to partly repay private investors in hotels and commercial facilities for the ongoing Sh31 billion development of the Bomas International Convention Complex (BICC).
The Tourism Levy is set at a rate of two percent of the gross receipts derived from the monthly sale of food, drinks, accommodation and other services in all regulated hotels, restaurants and other tourism activities.
Kenya is also planning to take up to 90 percent of the annual revenues from the Railway Development Levy (RDL) to secure funding for the extension of the standard gauge railway (SGR) from Naivasha to Malaba.
On the sports fund, the government is looking to utilise the headroom left after servicing the Talanta bond to load on more debt.
In the current year, the fund will spend Sh6.5 billion on the Talanta bond repayments, with a disbursement of Sh3.25 billion having been made on July 7, and the second one of a similar amount to come on January 7, 2027.
The 15-year Talanta bond was issued in July 2025 by Liaison Group, through a special vehicle known as Linzi FinCo 003 Trust.
The bond has a 15.04 percent rate of return, which will earn investors Sh57.6 billion in interest over the life of the debt. This interest income is exempt from withholding tax, giving the bond the same status as government-issued infrastructure bonds.
The paper is amortised, meaning that its principal will be paid down in equal instalments of about Sh2.98 billion annually, and therefore reducing the interest expense over time.
