Ruto assents to Infrastructure Fund Bill as KPC debuts at bourse

The National Infrastructure Fund (NIF) has finally come to pass, with the government saying the nation’s journey towards first world status has firmly been placed on course.

Having assented to the NIF Bill on Monday, President William Ruto said he will be at Nairobi Securities Exchange (NSE) this morning to ring the bell to launch trading of Kenya Pipeline Company’s (KPC) shares.

The firm’s Intial Public Offer (IPO) which raised Sh106 billion will be the seed money for the Fund.

He emphasised that this is not an experiment but a model adopted successfully around the world adding that the statute signed, specifically allows the NIF to leverage the technical expertise of development finance institutions of which Kenya is a member.

 “It looks too exact to be real but that is what it is. We would have moved earlier but our privatisation initiatives encountered some headwinds and around the same time, we sought to expand the Jomo Kenyatta International Airport (JKIA) through a public-private partnership, that proposal also met very strong resistance,” Ruto said, at an event held at State House.

“The National Infrastructure Fund is a commitment we made to Kenyans in our manifesto. Today, we fulfill that promise. It represents a new chapter in how Kenya finances its future,” he insisted.

Ruto said the expansion of JKIA will be the first major project financed through this model under the NIF, adding that the contract for its expansion has been announced and will be structured with about Sh20 billion from the proceeds of the KPC IPO.

He stated that the potential of domestic capital is immense, noting that last year alone, Kenyan pension fund assets grew by Sh700 billion representing a 25 per cent increase, bringing total pension assets to Sh2.81 trillion compared to Sh1.6 trillion in 2023.

According to the President, the annual growth of Sh700 billion, equivalent about $5.3 billion, exceeds World Bank’s estimate of total annual infrastructure financing requirement.

He explained that NIF provides a mechanism to channel long-term savings directly into infrastructure investment.

“This is money that can be used for our national development. Pension money is for pensioners but pensioners have children. That money must work for the pensioners and now we have the structure and plan to channel those resources in the right direction make sure it earns returns for pensioners but also supports our national development,” Ruto explained.

Ruto argued that the government’s goal is to leverage capital at least 12 times, mobilising up to Sh1.2 trillion for infrastructure investment and over time, this model will enable Kenya to mobilise close to Sh5 trillion in infrastructure investment over the next decade.

Previously, this asset would have provided the National Treasury with a dividend of about Sh5 billion annually but through NIF, that value will now be multiplied many times over, delivering infrastructure that benefits all Kenyans.

“Whatever it takes, I will continue to lead from the front, whatever the consequences because you do not get the opportunity to be president anytime, it is a privilege and great honour and while I have it, I will do the best that I can because it is high privilege to lead a nation,” Ruto said.

He affirmed that the law establishing NIF provides strong governance safeguards.

National Treasury Cabinet Secretary, John Mbadi, said assenting to the Bill was the culmination of a process that commenced in December last year, where together with Attorney General, they were tasked to begin the process of establishing the Fund.

According to Mbadi proposals for the Fund were informed by lessons learned from other countries that have experienced significant infrastructure development by transitioning from traditional debt and heavy spending to blended investment-led financing models.

“Projection for 2026/27 is that 48.7 per cent of ordinary revenue will go into debt service. We do not have space in increased taxation hence the necessity to come up with innovative ways of financing commercially viable infrastructure,” Mbadi stated.

He insisted on the need to take out of the budget, some of the commercially viable infrastructure projects, adding that the new law is about asset optimisation and asks whether public capital locked in mature enterprises is being deployed in the most productive way.

“I have heard people complain that we divesting and privatising assets that are making profits but they are not asking themselves whether we are optimising the value of those assets. They need to wake up and face reality that mature assets can be optimised better, put to better use, that we can privatise these enterprises, raise resources and invest in assets, which would give us more economic value,” said.

The National Assembly passed the NIF Bill 2026 last Thursday, paving way on how the country will finance and manage its ambitious infrastructure development projects.

Specifically, the Fund aims to mobilise nearly Sh5 trillion over the next decade to shift infrastructure financing from a debt-driven model to a sustainable, investment-led approach.

Unlike previous models which largely relied on borrowing to finance critical infrastructure development, the NIF is designed to attract investments from both public and private sectors.

The NIF Bill had faced opposition from some MPs raising concerns about oversight and the potential for excessive Executive influence.

Amendments were, however made to strengthen parliamentary oversight of the Fund, and expanded role of Parliament in oversighting the Fund was among key proposals made by stakeholders and members of the public during public engagements on the Bill.

The National Assembly Committee on Finance chaired by Molo MP, Kuria Kimani, introduced a series of safeguard amendments aimed at enhancing transparency, oversight, and professional management. 

One of the amendments is establishing a governing council, a high-level organ designed to provide overall direction and counsel and act as an additional layer of protection for the Fund’s assets. 

The Council will be composed of among others, the Cabinet Secretary for the National Treasury (chairperson), the Governor of the Central Bank of Kenya and the Attorney-General. 

Six non-public officers with proven leadership in finance or public policy, appointed by the President for a three-year term will also join the team.