Kenya’s Cabinet has approved $350 million in shareholder financing for Kenya Airways and endorsed a proposed restructuring of KSh122 billion ($941 million) in existing government loans, as the national carrier seeks to strengthen its balance sheet and attract fresh investment.
Kenya’s Cabinet has approved $350 million in shareholder financing for Kenya Airways and endorsed a proposed restructuring of KSh122 billion ($941 million) in existing government loans, as the national carrier seeks to strengthen its balance sheet and attract fresh investment.
The financing, announced on October 9, will be disbursed in tranches under the supervision of the National Treasury, with a repayment period of up to 10 years. The facility may also be converted into equity, subject to the necessary approvals.
The funds are intended to meet urgent financial obligations, including aircraft maintenance and the return of grounded aircraft to service, as the airline works to restore operational capacity.
Separately, the government has endorsed a proposal to convert KSh122 billion in existing loans and accrued interest into an “equity-qualifying tradable instrument”. The proposed restructuring is intended to strengthen Kenya Airways’ balance sheet and support future capital raising, although the final terms of the instrument have not been disclosed.
The restructuring could also affect the government’s ownership position in the Nairobi Securities Exchange-listed airline. If the financing is converted into shares, the state could increase its stake, potentially diluting existing minority shareholders. However, the extent of any change will depend on the final terms of the instruments and the necessary approvals.
The intervention comes amid mounting financial pressure on the airline. Kenya Airways reported a pre-tax loss of KSh15.92 billion in the first half of 2026, compared with KSh12.17 billion in the corresponding period of 2025. Higher fuel costs, aircraft maintenance delays and spare-parts shortages have constrained operations and added to the carrier’s financial challenges.
The government’s support also comes as Kenya Airways seeks a strategic investor to provide fresh capital and operational resources. The airline has attracted interest from potential investors in the United States, China, South Africa and Singapore, according to its chairman, Kiprono Kittony.
The strategic investment process is expected to support the carrier’s broader turnaround and capital-raising plans as the government considers options for strengthening the airline’s financial position.
Kenya’s Cabinet said the measures form part of a long-term turnaround plan for an airline that contributes more than $1.3 billion annually to the country’s economy through tourism, trade and regional connectivity.
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