Impact of Infrastructure Bond Interest Rates on the Performance of Road Projects within the Nairobi Metropolitan Area

Infrastructure projects in Kenya frequently encounter challenges related to timely completion and adherence to budgets. This research aims to determine the impact of infrastructure bond interest rates on the performance of road projects within the Nairobi Metropolitan Area. The research employed a longitudinal research design to effectively address its objectives. The study population encompassed all 61 road construction projects conducted between 2014 and 2022. A comprehensive survey of these road projects was carried out. Secondary data for the years 2014 to 2022 were gathered from a variety of sources, including the Central Bank of Kenya, National Treasury, Ministry of Transport, Infrastructure, Housing, Urban Development, and Public Works, as well as the Kenya Urban Roads Authority. Data was analyzed using descriptive statistics and inferential statistics aided by STATA ver.14.0. The hypothesized relationships were tested using panel regression. The findings revealed that increasing infrastructure bond interest rates negatively affect the completion of road infrastructure, with a statistically significant inverse relationship between bond interest rates and kilometers of roads completed. To improve road infrastructure completion, the government should consider stabilizing or reducing infrastructure bond interest rates through policies including subsidies, government-backed guarantees, or interest rate caps.