State now turns to KAA to fund new airport after Adani fallout

The government has opted to use Kenya Airports Authority’s (KAA) balance sheet to scout for funding that will facilitate the construction of a new airport.

The decision follows the infamous Adani deal that did not materialise, with the Transport Cabinet Secretary Davis Chirchir insisting that economic infrastructure should not come at the cost of the government’s investment in social development initiatives such as education and health.

The CS, who spoke during the signing of the JKIA Customer Service Charter at the Jomo Kenyatta International Airport (JKIA) in Nairobi, yesterday, said the plan will be submitted to the Cabinet, where a framework on how the leveraging should be done will be communicated.

KAA, the State agency, which oversees airports in the country is still recovering from losses following the termination of the 2017 JKIA Greenfield Terminal project which left it in a debt of more than Sh4 billion.

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The authority however prides itself with assets over Sh1 trillion.

Mr Chirchir was accompanied by cabinet secretaries for Interior counterpart Kipchumba Murkomen, Tourism Rebecca Miano as well as the Principal Secretary in the State Department for Transport Mohammed Daghar and Inspector General of Police Douglas Kanja.

He said once the framework is approved, the financing should be expedited considering other neighbouring countries have new airports already.

“We will be looking at KAA’s balance sheet, working with various development finance institutions (DFIs), be it Export-Import Bank (Exim) or Export Credit Bank,” said the CS.

“The airport should be able to leverage its balance sheet to develop a new airport so that it is not competing with other social infrastructure that we need to do in education and health and food security.” Mr Chirchir said the government will soon communicate through Cabinet on the approved framework of this plan to leverage the authority’s balance sheet.

“We are looking at policies on investments which can support themselves as a business. The fiscal headroom that we have today to be able to support social infrastructure like education and health sector, cannot compete with investments which can draw their revenue, run on their balance sheet and be able to service the debt,” he said. The Cabinet in its February 11, 2025 dispatch communicated several initiatives set to take place that aim to improve customer experience among them infrastructure. These include a modernised baggage handling system, improved stormwater drainage as some facilities as roofed with tents, enhanced air conditioning and clear signage.

“These measures take immediate effect, reinforcing JKIA’s position as a leading aviation hub by improving efficiency, security and overall passenger experience,” read the Cabinet dispatch in part. JKIA is under KAA which reported a net loss of Sh474 million for the year ended June 2023 - linked to the termination of the greenfield passenger terminal complex (T3) which resulted in a write-off of Sh4.6 billion.

“The importance of this is that JKIA can now successfully procure a new terminal to enhance its capacity and continue its hub status with the East Africa region,” said the KAA acting chief executive Henry Ogoye, as documented in the Auditor General report.

The report also shows that KAA assets amount to Sh1.1 trillion as of the end of June 2023, a growth from Sh73.3 billion as of June 2022. “The increase was mainly due to revaluation of land by Sh980.4 billion,” says KAA.

KAA is the agency in charge of the service charter signed with all other departments and agencies. The charter has roped in the Directorate of Immigration Services, Kenya Revenue Authority, Customs, and the Kenya Airports Police Unit among other agencies. CS Miano said the charter will play a key role in achieving the five million visitors target by 2027. This number currently stands at 2.4 million.