Kenya Seeks Sh39 Billion Loan for Nationwide Stadium Development

The Kenyan government is planning to raise a new Sh38.74 billion loan against the Sports, Arts and Social Development Fund (SASDF) to finance the construction, completion and renovation of 33 stadiums across the country, in a major push to upgrade the country's sports infrastructure.

The development, first reported by Business Daily, would mark the second major borrowing initiative backed by the Sports Fund, following the Sh44.8 billion Talanta bond, whose proceeds are being used to finance the construction of the 60,000-seater Raila Odinga Stadium in Nairobi.

The SASDF has already started the process of appointing a transaction advisor and lead arranger who will help structure the proposed financing facility.

According to a public disclosure by the Sports Fund, the proposed loan would have a repayment period of 15 years, similar to the structure of the Talanta bond.

"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 fund stated.

The disclosure indicates that the amount being sought corresponds to the cumulative project contract value of the stadium developments.

The Sports Fund estimates that the projects will require Sh38.74 billion, excluding the facility fee associated with securing the financing.

The government wants the transaction to be completed as quickly as possible, with the appointed advisors expected to work towards securing the facility within 60 days of receiving the mandate.

"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 disclosure stated.

The advisors will be responsible for identifying potential sources of funding, negotiating lending terms and developing financial models designed to ensure the projects can be supported over the long term.

The proposed financing programme covers stadium construction and upgrades in several parts of Kenya. Major urban centres including Mombasa, Kisumu, Nakuru and Eldoret are among the areas set to benefit, while stadium projects are also planned or ongoing in more than 20 other counties.

The programme comes as Kenya seeks to improve sporting facilities across the country and provide better venues for football and other sporting activities.

Some of the country's most prominent stadium projects are already receiving major attention ahead of the 2027 Africa Cup of Nations (AFCON).

Nairobi's Kasarani Stadium and Nyayo National Stadium are undergoing upgrades as Kenya prepares to co-host the continental tournament alongside Tanzania and Uganda.

The wider infrastructure programme is therefore expected to play an important role in improving Kenya's ability to host major international sporting events while leaving behind upgraded facilities for domestic competitions.

The proposed financing will use a structure known as securitisation, allowing the government to borrow against expected future revenues generated through the Sports Fund.

A significant portion of the fund's income comes from levies and taxes associated with the betting industry. These future collections would be used to service the principal and interest on the proposed loan.

The Sports Fund is projected to collect approximately Sh2.07 billion every month from these levies.

The government's ability to service the proposed financing is supported by the performance of betting-related tax collections.

In the financial year ending June 2026, taxes from betting services exceeded the government's target, reaching Sh16.5 billion against a projected collection of Sh14.26 billion.

The strong performance provides the government with a substantial revenue stream that can potentially be used to support the new borrowing programme.

The planned stadium loan comes at a time when the government's room for conventional borrowing has become increasingly constrained by rising public debt.

As a result, the government has been exploring alternative financing mechanisms, including securitisation and public-private partnerships (PPPs), to fund major infrastructure projects.

The approach allows the government to raise money against future revenue streams rather than relying entirely on traditional borrowing through the Treasury.

The new borrowing plan will also have to take into account the existing obligations tied to the Talanta bond. The government has allocated Sh6.5 billion in the current financial year towards Talanta bond repayments, with the amount split into two equal instalments.

The bond is structured as an amortised security, meaning the principal is progressively reduced through scheduled repayments.

Approximately Sh2.98 billion of the principal is expected to be repaid annually under the structure. As the outstanding principal declines, the government will also gradually reduce the amount of interest payable over the life of the bond.

If approved and successfully implemented, the proposed Sh38.74 billion facility would significantly expand the country's stadium infrastructure programme.

For Kenya, the investment comes at a crucial time as the country prepares for PAMOJA AFCON 2027 and seeks to strengthen its capacity to host major international sporting events.

However, the financing also adds another long-term obligation to the Sports Fund, making the performance of the revenue streams backing the loan critical to its sustainability.

The government's challenge will therefore be to balance the need for modern sports facilities with the responsibility of ensuring that future Sports Fund revenues can comfortably meet the loan repayments.