The government will undertake several takeovers of distressed loans, which will increase its annual debt service by 10 billion shillings, officials told the International Monetary Fund (IMF).

The airline has been receiving frequent bailouts, with another 35 billion shillings expected in the current fiscal year.

The airline has defaulted on a portion of a $525 million loan from the US-based Private Export Funding Corporation which was guaranteed by the government.

“The guarantees are already part of the government’s debt stock and not likely to cause significant impact, other than an increase in the annual payment obligations,” Cabinet Secretary for National Treasury Njuguna Ndungu stated.