Taxpayers now have the responsibility of keeping Kenya Airways (KQ) afloat by clearing KSh 38.86 billion bill in the financial year starting July 1.
According to the Parliamentary Budget Office (PBO), the money will be used to clear the airline’s due interest payments on State-guaranteed loans.
PBO said the government will spend at least KSh 2.2 billion to clear interest payments for a debt guaranteed to KQ.
The funds are part of KSh 36.6 billion the government set aside to bail out the national carrier in fiscal 2022/23.
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KQ has been requesting baillouts from the government to maintain planes, some which are grounded, pay salaries and settle utility bills such as water and electricity.
The state guaranteed had guaranteed the airline a KSh 61 billion loan from the Export-Import Bank of the US and a KSh 26 billion short term loans from local banks.
PBO has advised MPs to review of KQ’s debts to identify actions the government can take to lower its repayment obligations.
“It is, therefore, critical that a review of the composition of the portfolio, and the financial status of institutions whose loans have been guaranteed to establish embedded risks and whether remedial measures can be taken to avoid further materialization of the guarantee liability,” it said.
At the end of 2022/23, KQ will have received KSh 83.1 billion in cash bailouts to keep it operational.
