National Infrastructure Fund key to Kenya's growth

Recently, the National Assembly received a Bill proposing establishment of the National Infrastructure Fund (NIF). Predictably, questions have followed. Why do we need another fund when Kenya already issues bonds that support infrastructure projects?

The concerns are valid. At its core, the National Infrastructure Fund is about restructuring how we finance, prioritise and sustain infrastructure in line with Kenya’s Bottom-Up Economic Transformation Agenda (BETA). It is a structural upgrade.

A shift from project-by-project borrowing to a pooled, professionally managed financing platform designed to mobilise large-scale and long-term capital. The NIF Bill is a robust and forward-thinking framework.

It draws lessons from global models such as India’s National Infrastructure Investment Fund, which has so far mobilised over $4 billion in capital and successfully “crowded” in private investments including in renewable energy expansion. The Kingdom of Saudi Arabia operates the Saudi Arabia National Development Fund (NDF) and Public Investment Fund (PIF).

PIF assets have grown to over $900 billion, heavily invested in tourism, technology and renewable energy while NDF fosters sustainable economic development. Dr Bernard Chitunga, Global Development Finance Expert and the Chancellor of Co-operative University (Kenya), argues that NIF has the potential for catalytic impact on the economy as this structure is designed to replicate Saudi Arabia’s success in de-risking projects and unlocking large-scale commitments without contradicting the role of the Public-Private Partnerships unit.

The examples demonstrate how well-structured infrastructure financing can catalyse economic transformation. The BETA framework, championed by President William Ruto, alongside the Vision 2030, are anchored on expanding economic opportunity from the ground up; from agriculture, to MSMEs, housing, healthcare, and finally the digital economy. At the heart of this agenda is President Ruto’s bold ambition to position Kenya as Africa’s “Singapore”. A first class globally competitive nation defined by efficiency, innovation and inclusive prosperity.

Yet none of these pillars can function without reliable infrastructure: roads to get produce to market, energy to power small businesses, water systems to support housing and digital connectivity to unlock innovation and creativity. Historically, Kenya has financed infrastructure projects through exchequer allocations and instruments such as infrastructure bonds (IFBs) issued by the National Treasury. These allocations have been valuable tools. However, they operate within annual budget cycles and are subject to fiscal pressures, pending bills, competing demands and rising public debt constraints.

The National Infrastructure Fund introduces a different approach. Rather than financing projects one exchequer allocation or one IFB at a time, NIF is proposing leveraging on a structured, pooled investment vehicle that mobilises long-term capital for priority infrastructure projects. This model creates a dedicated, ring-fenced financing mechanism focused specifically on bankable and revenue-generating infrastructure. Simply put, each shilling put in the fund will attract ten times of private sector money or more. What if we pump Sh1.3 trillion initial capital and grow it to Sh5 trillion?

Everyday, Kenyans farmers need irrigation systems and logistics corridors. Affordable housing requires serviced land, water, road and energy networks. MSMEs require reliable power and transport access. Digital entrepreneurs require connectivity. Infrastructure is not a side conversation; it is the backbone of economic productivity.

Once operational, NIF will improve predictability. By pooling resources into a single professionally managed vehicle, infrastructure planning becomes more strategic and less fragmented. Projects can be sequenced based on economic impact rather than budget timing.

Ultimately, success will be measured by the number of dams built, land irrigated, dualled roads upgraded, highways constructed, airports and airstrips upgraded, stadiums built, industrial parks powered. It will be incomes that rise and job creation. All leading to one thing: Pesa Mfukoni.

-Acting Head of the Government Delivery Unit.