The legislation establishes a dedicated financing mechanism aimed at mobilising resources for major national projects while reducing reliance on traditional public debt.
The fund is expected to become a central pillar in the government’s plan to accelerate development of key infrastructure such as highways, railways, airports and energy systems.
Why the National Infrastructure Fund Was Created.
The fund is expected to become a central pillar in the government’s plan to accelerate development of key infrastructure such as highways, railways, airports and energy systems.
Why the National Infrastructure Fund Was Created.
The Kenyan government says the fund is designed to ease the growing pressure on public borrowing.
In recent years, the country has faced increasing debt obligations, forcing policymakers to explore alternative ways of financing development.
Under the new framework, the government aims to raise up to KSh5 trillion. Some of the money will come from the partial privatisation of selected state-owned enterprises and government stakes in major companies.
Among the assets expected to contribute to the fund are shares in Safaricom and the Kenya Pipeline Company.
Officials argue that this approach will attract long-term investors and reduce the need for external borrowing.
Who Will Manage the Fund
The law provides for the establishment of a board of directors that will oversee the management of the National Infrastructure Fund.
The board will be chaired by an independent director and will include representatives from the National Treasury and professionals with experience in development banking.
In addition to the board, the fund will have a governing council responsible for providing strategic direction and safeguarding the fund’s assets.
The council will be chaired by the Treasury Cabinet Secretary John Mbadi and will include the governor of the Central Bank of Kenya as well as the Attorney General.
Where the Money Will Come From
Unlike traditional government borrowing, the fund will rely heavily on private and institutional investors.
Key sources of capital are expected to include:
Domestic pension funds
Collective investment schemes
Sovereign wealth funds
Climate financing facilities
Private infrastructure investors
Treasury officials say tapping into these alternative sources will provide long-term financing while easing the burden on taxpayers.
Concerns Raised by Critics
Despite the government’s optimism, the new financing model has drawn criticism from some politicians and governance experts.
Ndindi Nyoro warned that the fund could effectively become another form of borrowing if not carefully managed.
Some experts also fear that the fund might create a parallel budgeting system that could weaken parliamentary oversight over public spending.
Governance analyst Kevin Osido has cautioned that Kenya must first strengthen accountability systems before introducing such a large financial structure.
According to him, poor governance and weak oversight in public finance management could expose the fund to misuse if adequate safeguards are not put in place.
Projects the Fund Will Finance
The National Infrastructure Fund will only finance projects considered economically strategic and commercially viable.
Priority sectors listed in the law include:
National highways and railway networks
Airports and seaports
Electricity generation and transmission
Water reservoirs and irrigation systems
Agribusiness infrastructure
One of the major projects expected to benefit from the new financing model is the planned expansion of Jomo Kenyatta International Airport.
President Ruto has indicated that the fund will help fast-track such large-scale projects that are crucial for economic growth.
A New Direction for Infrastructure Financing
Supporters believe the National Infrastructure Fund could transform how Kenya finances development by attracting private capital into public infrastructure.
However, critics argue that strong governance, transparency and oversight will be essential to ensure the fund does not become another source of financial risk.
As implementation begins, attention will likely focus on how effectively the new institution mobilises funds and whether it can deliver the promised infrastructure without increasing the country’s debt burden.
In addition to the board, the fund will have a governing council responsible for providing strategic direction and safeguarding the fund’s assets.
The council will be chaired by the Treasury Cabinet Secretary John Mbadi and will include the governor of the Central Bank of Kenya as well as the Attorney General.
Where the Money Will Come From
Unlike traditional government borrowing, the fund will rely heavily on private and institutional investors.
Key sources of capital are expected to include:
Domestic pension funds
Collective investment schemes
Sovereign wealth funds
Climate financing facilities
Private infrastructure investors
Treasury officials say tapping into these alternative sources will provide long-term financing while easing the burden on taxpayers.
Concerns Raised by Critics
Despite the government’s optimism, the new financing model has drawn criticism from some politicians and governance experts.
Ndindi Nyoro warned that the fund could effectively become another form of borrowing if not carefully managed.
Some experts also fear that the fund might create a parallel budgeting system that could weaken parliamentary oversight over public spending.
Governance analyst Kevin Osido has cautioned that Kenya must first strengthen accountability systems before introducing such a large financial structure.
According to him, poor governance and weak oversight in public finance management could expose the fund to misuse if adequate safeguards are not put in place.
Projects the Fund Will Finance
The National Infrastructure Fund will only finance projects considered economically strategic and commercially viable.
Priority sectors listed in the law include:
National highways and railway networks
Airports and seaports
Electricity generation and transmission
Water reservoirs and irrigation systems
Agribusiness infrastructure
One of the major projects expected to benefit from the new financing model is the planned expansion of Jomo Kenyatta International Airport.
President Ruto has indicated that the fund will help fast-track such large-scale projects that are crucial for economic growth.
A New Direction for Infrastructure Financing
Supporters believe the National Infrastructure Fund could transform how Kenya finances development by attracting private capital into public infrastructure.
However, critics argue that strong governance, transparency and oversight will be essential to ensure the fund does not become another source of financial risk.
As implementation begins, attention will likely focus on how effectively the new institution mobilises funds and whether it can deliver the promised infrastructure without increasing the country’s debt burden.
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