Kenya Tables National Infrastructure Fund Bill to Mobilize Sh5 Trillion for Major Projects
Kenya's National Assembly has introduced legislation to establish a dedicated infrastructure fund targeting Sh5 trillion in financing, marking a strategic shift away from public debt and taxation toward alternative funding mechanisms for long-term development projects.
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Kenya's government has introduced the National Infrastructure Fund Bill 2026 to Parliament, a legislative framework designed to mobilize approximately Sh5 trillion for financing major infrastructure projects while reducing the country's dependence on public debt and taxation.
The bill, sponsored by National Assembly Majority Leader Kimani Ichung'wah, represents a significant policy shift in how Kenya plans to fund its ambitious infrastructure agenda amid mounting debt sustainability concerns. The proposed fund seeks to create an alternative financing vehicle that could reshape the country's approach to capital-intensive projects in transport, energy, water, and digital infrastructure.
Strategic Shift in Infrastructure Financing
The timing of the legislation reflects growing pressure on Kenya's fiscal position. The country's public debt stood at approximately Sh11 trillion as of mid-2025, with debt servicing consuming a substantial portion of government revenue. By establishing a dedicated infrastructure fund, authorities aim to tap into pension funds, insurance companies, and other institutional investors to finance projects without adding to sovereign borrowing.
According to Nairobi Law Monthly, the National Infrastructure Fund Bill 2026 "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 legislation outlines mechanisms for pooling domestic capital and potentially attracting foreign investment into infrastructure development through structured financial instruments.
The bill's introduction follows similar initiatives across the continent, where countries including Nigeria, South Africa, and Ghana have established infrastructure banks or funds to address massive financing gaps. The African Development Bank estimates that Africa faces an infrastructure financing gap of between $68 billion and $108 billion annually, with Kenya's share representing a significant portion of East Africa's deficit.
Legislative Framework and Implementation
The proposed legislation is expected to establish governance structures, investment criteria, and risk management frameworks for the fund. While full details of the bill remain under parliamentary review, the framework likely includes provisions for public-private partnerships, project selection mechanisms, and oversight arrangements to ensure transparency and accountability in fund deployment.
Majority Leader Ichung'wah's sponsorship of the bill signals strong government backing for the initiative. The legislation will need to navigate parliamentary committees before full debate and potential passage, a process that typically involves scrutiny from the Finance and National Planning Committee as well as input from the National Treasury and relevant sector ministries.
The fund's success will depend on its ability to attract institutional investors, particularly pension funds which collectively manage over Sh1.5 trillion in assets. Regulatory frameworks governing pension fund investments currently limit exposure to infrastructure assets, suggesting that complementary regulatory reforms may be necessary to unlock this capital pool.
Debt Sustainability and Economic Implications
Kenya's push for alternative infrastructure financing comes as the International Monetary Fund and World Bank have repeatedly flagged concerns about the country's debt trajectory. The government has committed to reducing the fiscal deficit and containing borrowing, making the infrastructure fund a critical tool for maintaining development momentum without breaching debt sustainability thresholds.
The Sh5 trillion target, if realized over the fund's operational period, could finance transformational projects including railway extensions, port expansion, renewable energy installations, and urban transit systems. However, mobilizing such substantial sums will require investor confidence in project viability, returns on investment, and political stability.
Regional observers note that Kenya's initiative could set a precedent for East African Community partners facing similar infrastructure deficits and debt constraints. Tanzania and Uganda have expressed interest in comparable financing mechanisms, potentially opening avenues for regional infrastructure funds that could finance cross-border projects.
As the bill moves through the legislative process, stakeholders will be watching closely to see how the government balances investor returns with affordable infrastructure delivery, and whether the fund can genuinely reduce pressure on the national budget while accelerating Kenya's development agenda.