President William Ruto has held discussions with the International Finance Corporation (IFC) as Kenya advances plans to establish a National Infrastructure Fund (NIF), as the proposed fund's founding bill moves through the legislative process.
- •The meeting, held at State House Nairobi, brought together an IFC delegation led by Vice-President for Africa Ethiopis Tafara and Vice-President for Products and Clients Mohamed Gouled.
- •Government officials have indicated that proceeds from selected state asset sales could be used to capitalize the fund, beginning with the parallel ongoing sale of part of the government's stake in Safaricom.
- •Infrastructure funds are pooled investment vehicles established to finance, build, upgrade or operate long-term physical assets that underpin economic activity.
"The IFC’s expertise will help us build a strong and credible vehicle capable of mobilising Ksh5 trillion to finance our ambitious infrastructure programme and accelerate our transformation into a first-world economy," President Ruto said in a post on X.
In recent years, rising debt-servicing costs have put pressure on the national budget, prompting the government to explore alternative funding models. The proposed model is expected to adopt a hybrid structure, blending government participation with private capital.
The fund's projects would typically include highways, ports, railways, airports, power plants, water infrastructure and digital networks. Unlike conventional government expenditure, such funds are structured to attract pension funds, insurers, sovereign investors and development finance institutions.
Well-designed infrastructure funds can help spread project risks, lengthen financing tenors and reduce immediate fiscal strain by shifting part of the funding burden to private and institutional investors. However, success is dependent on strong governance, transparency, clear project pipelines and stable regulatory frameworks.
