Kenya’s National Assembly has approved a landmark piece of legislation aimed at transforming how the country finances major development projects. Lawmakers passed the National Infrastructure Fund Bill, paving the way for the establishment of a new financing vehicle that could mobilize up to KSh 5 trillion to support key infrastructure projects across the country.The proposed fund is expected to play a major role in financing large-scale projects such as roads, railways, energy infrastructure, and urban development initiatives. By creating a dedicated investment fund, the government hopes to attract both domestic and international investors who are looking for long-term investment opportunities in infrastructure.
For years, Kenya has relied heavily on external borrowing and sovereign debt to finance large development projects. Major initiatives such as highways, ports, and railways have been funded through bilateral loans, multilateral lenders, and the issuance of Eurobonds. However, rising public debt levels and increasing global borrowing costs have forced policymakers to explore alternative financing models.The new infrastructure fund is designed to reduce the government’s reliance on traditional debt by allowing institutional investors such as pension funds, insurance companies, development finance institutions, and private investors to participate in financing national projects. These investors would provide capital to the fund in exchange for returns generated from infrastructure investments.
Under the proposed structure, the fund will operate as a professionally managed investment vehicle. It will identify viable projects, invest in them, and generate returns through mechanisms such as toll fees, service charges, or long-term infrastructure concessions. These revenue streams will then be used to provide returns to investors while also supporting continued infrastructure development.Supporters of the bill argue that the initiative will help accelerate Kenya’s economic development by unlocking private capital for projects that would otherwise depend entirely on public funding. Infrastructure remains one of the key drivers of economic growth, enabling trade, improving logistics, and enhancing productivity across sectors.
The government has also emphasized that the fund could strengthen Kenya’s position as a regional economic hub by improving transport networks, expanding energy access, and supporting modern urban infrastructure. Better infrastructure can lower business costs, improve efficiency in supply chains, and attract more foreign investment into the country.However, some policymakers and economic analysts have urged the government to ensure strong governance and transparency in the management of the fund. Large infrastructure financing vehicles often require strict oversight to ensure funds are used effectively and that projects selected are financially viable.With the National Assembly’s approval, the bill now moves to the next legislative steps before full implementation. If successfully launched, the National Infrastructure Fund could mark a significant shift in how Kenya finances development—moving from heavy reliance on public borrowing toward a model that mobilizes private capital to support national growth and infrastructure expansion.
