President William Ruto's administration has commenced the legislative journey to establish the long-awaited National Infrastructure Fund.
The flagship initiative is aimed at changing how the country finances its critical infrastructure projects.
The National Infrastructure Fund Bill, 2025, seeks to fulfil the President's repeated pledges to create innovative financing mechanisms, reducing reliance on traditional public debt.
The bill directly addresses one of the Kenya Kwanza administration's primary concerns, which is Kenya's overreliance on public borrowing for infrastructure development.
By establishing a dedicated fund that mobilises private capital and non-traditional financing sources, the government seeks to scale up infrastructure investment while protecting the national exchequer from additional fiscal pressure.
According to the memorandum of objects and reasons, the fund will target catalytic national infrastructure across multiple sectors, including national highway and railway networks, air and sea ports, electricity generation and transmission, water reservoirs, irrigation systems and agribusiness infrastructure.
The comprehensive approach is hailed as aligning with the administration's Bottom-Up Economic Transformation Agenda (BETA).
The fund is designed to tap into domestic pension funds, collective investment schemes, sovereign wealth funds and climate finance mechanisms.
The multi-pronged strategy aims to unlock billions of shillings in private capital that has traditionally remained on the sidelines of public infrastructure development.
In a significant departure from traditional state corporations, the bill establishes rigorous governance standards designed to insulate the fund from political interference.
The nine-member board of directors will comprise an independent chairperson, four independent directors, and two development banking experts, alongside the National Treasury CS.
Strict disqualification criteria prevent individuals with recent government employment, political party affiliations, or close ties to government-owned enterprises from serving as independent directors.
The independence framework is aimed at building investor confidence and ensuring professional management of public resources.
The fund will develop in-house capacity for project origination, structuring and implementation, addressing a critical gap that has historically hindered infrastructure development.
Through feasibility studies, preparing investment plans, and negotiating investment agreements, the fund aims to create a pipeline of bankable projects ready for investor participation.
The Bill mandates consideration of technical requirements, legal frameworks, social and environmental impacts, affordability and value for money when assessing potential investments.
While the fund will operate independently, the CS may issue government support measures, including binding undertakings, letters of credit and partial risk guarantees.
The administration has embedded extensive transparency requirements throughout the bill. The fund must publish audited annual reports, performance evaluation results and director appointment procedures on public platforms.
Quarterly reports to the CS and annual reports to the National Assembly will ensure parliamentary oversight.
The bill's progression carries particular political weight for President Ruto, who has consistently advocated innovative infrastructure financing since his tenure as Deputy President.
As Majority Party leader Kimani Ichung'wah, the bill's sponsor, noted in the memorandum, the legislation responds to the need to "strengthen national capacity for origination, structuring and execution of large and complex infrastructure projects".
The bill, designated as a Money Bill under Article 114 of the Constitution, was introduced to the National Assembly last week.
If enacted, the fund will commence operations on a date appointed by the CS through Gazette notice, potentially before the end of 2026.
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