The government has moved with speed and unveiled the National Infrastructure Fund bill that is expected to mobilize about Sh5 trillion to finance major long-term projects to enable the country to reduce its reliance on public debt and taxation.
The National Infrastructure Fund Bill, 2026, sponsored by National Assembly Majority Leader Kimani Ichung’wah, also outlines the governance structure of the fund and the running of the kitty whose seed capital will come from privatization of various state entities.
According to the bill, the purpose of the Fund will be to scale up and accelerate development of catalytic national infrastructure, mobilize private capital and non-traditional sources of infrastructure finance and to reduce reliance on public debt for the financing of commercially viable infrastructure investments.
It will also mobilize private capital and nontraditional sources of infrastructure finance, including domestic pension funds and collective investment schemes, sovereign wealth funds and climate finance.
The tabling of the bill comes after the Cabinet in December last year established the National Infrastructure Fund after approving the Sh5 trillion kitty alongside the Sovereign Wealth Fund, which are part of efforts to mobilize local sources to improve the country’s financial standing.
The bill reads: “The principal object of the bill is to provide for the establishment, management and performance of the National Infrastructure Fund.”
It adds: “The purpose of the fund is to reduce reliance on public debt for the financing of commercially viable infrastructure investment. It will also strengthen the national capacity for origination, structuring and execution of large and complex infrastructure projects.”
According to the bill, the fund is intended to shift infrastructure financing towards an investment-led model designed to attract private capital.
Among projects listed as potential beneficiaries are the Loosuk–Lessos power transmission line, the Galana-Kulalu irrigation project, the Rironi–Naivasha–Mau Summit highway and the Standard Gauge Railway (SGR) extension to Malaba — a project President William Ruto has recently insisted should not be funded through loans.
Speaking during a forum on the Bill in Mombasa, Departmental Committee on Finance and National Planning chairperson and Molo MP Kuria Kimani assured that the fund will be ringfenced to only support development projects.
“A majority today has supported the proposed divestiture. However, they are concerned about money being misused like the Eurobond. The tabled Bill will see proceeds from privatization or sale of government assets go to this account where they will be ring fenced for viable projects like airports, dams and spent for intended purposes,” he said.
His sentiments come at a time when MPs are expected to conclude approval of the proposed offloading of 15 percent of the government’s stake in Safaricom PLC that will see the government raking in Sh 244.5 billion.
This is after the committee concluded stakeholder engagement on the proposed sale that took place in 30 counties where members of the public called for the prudent use of proceeds should the transaction go through.
Treasury Cabinet Secretary John Mbadi is on record saying that 90 percent of the Safaricom proceeds will be directed to the fund to support long-term development projects.
“We are not going to directly use money obtained from the privatization of Kenya Pipeline Company and Safaricom share sale to pay salaries and debt. It is not going to fund any budget. 90 percent of that money will be put into the National Infrastructure Fund. Then the NIF will be used to leverage and crowd the public sector funding into commercially viable public infrastructure projects,” he said.
And with regards to the governance structure of the fund, the bill says that the fund will operate like a limited liability company and will be run by a Board of Directors.
The board of directors will consist of a chairperson who is an independent director, Cabinet secretary National Treasury.
Others are four persons who are independent directors who shall be recruited in accordance with section 13 of the Government Owned Enterprises Act , two persons who have experience in senior leadership roles in development banking and a Chief Executive officer who shall be an ex-officio member of the board.
According to the bill, the functions of the board will be to invest in projects, acquire and hold securities, surrender the security, exchange, sell, assign, convey or otherwise dispose of, or lease, the investment, agreement, security, interest or right in a security, enter into arrangements or agreements, accept any interest or rights in real property or personal property as well as determine any form of compensation for services provided.
The bill says that the fund will be required to submit its reports first to the Cabinet Secretary, who would then forward them to the Cabinet and the National Assembly, with disclosures published on the Treasury website.
The CEO on the other hand will be responsible for the day-to-day management of the affairs of the board as well as perform functions of the board.
– By Wamuyu Wanjohi
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