Kenya Airways is set to receive Ksh 45.4 billion in government financing to meet urgent operational costs, including aircraft maintenance and the return of grounded planes to service, following a Cabinet decision announced on Friday, October 9, 2026.
The funding is part of the government’s efforts to stabilise the national carrier as it works towards a long-term financial turnaround.
In a statement issued after a Cabinet meeting at State House, Nairobi, the government said the financing would be released in instalments under the supervision of the National Treasury. The facility will have a repayment period of up to 10 years, with an option to convert it into equity subject to the required approvals.
Cabinet also approved a proposal to convert Ksh 122 billion in existing government loans, together with accrued interest, into an equity-qualifying tradable instrument. The move is intended to strengthen the airline’s balance sheet and improve its ability to attract additional capital.
However, the proposed changes cannot take effect immediately, as they still require corporate, shareholder and regulatory approvals.
The government said the intervention was aimed at safeguarding an airline that contributes more than $1.3 billion annually to Kenya’s gross domestic product through tourism, trade and regional connectivity.
The fresh financing is expected to ease immediate cash-flow pressures, particularly those linked to aircraft maintenance and restoring grounded planes. Having more aircraft available for service could help the carrier meet operational demands as it pursues its recovery plan.
Kenya Airways has faced financial challenges over the years, making government support and balance-sheet restructuring important elements of efforts to restore its financial position.
Treasury to pay Ksh 23.74 billion in pending bills
In a separate decision, Cabinet approved the settlement of 28,726 verified government pending bills worth Sh23.74 billion, offering relief to suppliers and contractors who have waited for payment, in some cases, since 2005.
The approved claims, each valued at Sh50 million or less, account for 98 per cent of the 29,257 claims recommended for settlement following a review by the Pending Bills Verification Committee.
The committee received 115,617 claims worth Sh664.8 billion. After verification, it recommended 29,257 claims valued at Sh155.34 billion for payment.
The National Treasury will oversee the settlement, prioritising micro, small and medium-sized enterprises, particularly businesses owned by women, young people and persons with disabilities.
The payments are expected to ease financial pressure on affected businesses, which have faced difficulties meeting expenses and maintaining operations while waiting for government payments.
Cabinet said the settlement would help protect jobs, improve cash flow and restore confidence among suppliers and contractors.
Verified bills exceeding Ksh 50 million will be settled progressively, according to the government.
The two decisions address separate financial pressures: supporting the national carrier’s recovery while clearing verified government debts owed to businesses.
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