Ruto names Sh20 billion JKIA expansion first project under National Infrastructure Fund

President William Ruto has signed the National Infrastructure Fund Bill into law, unveiling a new financing model designed to mobilise domestic capital for large-scale infrastructure projects across Kenya.

Speaking during the signing ceremony on Monday, Ruto said the fund would help bridge Kenya’s infrastructure financing gap while reducing the country’s reliance on foreign borrowing.

“This moment represents more than the creation of a fund. It represents a new chapter in how Kenya finances its future,” the president said.

Ruto announced that the expansion of Jomo Kenyatta International Airport will be the first major project financed through the new framework.

The airport expansion will be structured with about Sh20 billion in equity participation from the National Infrastructure Fund and domestic institutional investors.

The government hopes the model will allow Kenya to finance large projects while maintaining fiscal discipline following years of debt pressure and global economic shocks.

The new fund is designed to tap into the growing pool of local savings, particularly pension funds.

According to the president, Kenyan pension assets grew by Sh700 billion last year, bringing the total to Sh2.81 trillion.

The fund will allow these long-term savings to be invested directly in infrastructure projects.

He added that infrastructure projects often require financing periods of 30 years or more, making pension savings a natural match for such investments.

To seed the fund, the government plans to channel proceeds from the upcoming listing of Kenya Pipeline Company on the Nairobi Securities Exchange.

The president said the IPO has generated Sh106 billion, which will be used as the initial capital base for the National Infrastructure Fund.

The government intends to leverage the capital up to 12 times, potentially mobilising Sh1.2 trillion for infrastructure investment.

Over the next decade, Ruto said the financing model could unlock up to Sh5 trillion in infrastructure spending.

The government argues the new model will help address several challenges linked to traditional infrastructure financing.

These include:

• Short loan repayment periods compared with the long life of infrastructure assets

• High cost of borrowing in African markets

• Currency risks when projects are financed in foreign currencies but generate revenue in Kenyan shillings

Ruto cited the example of the Standard Gauge Railway, which was financed through loans with shorter repayment timelines than the railway’s expected economic life.

The infrastructure fund will operate alongside the recently enacted Government-Owned Enterprises Act, which introduces a new governance framework for state corporations.

Under the law, institutions such as:

Kenya Airports Authority, Kenya Ports Authority, Kenya Railways, Kenya Electricity Transmission Company, and Geothermal Development Company, could eventually access capital markets to raise funds for infrastructure investment.

The National Infrastructure Fund will also have a governing council and parliamentary oversight to ensure transparency and accountability in its investments.

Ruto said the new framework draws from similar infrastructure financing models used internationally, including those in countries such as Nigeria, Ghana, India, Canada, the United Kingdom, and South Africa.

Development finance institutions, including the World Bank and the International Finance Corporation, supported the design of the fund.

According to the president, the initiative marks a shift toward financing infrastructure using Kenyan savings rather than relying heavily on sovereign debt.

Kenya faces a significant infrastructure financing gap. The World Bank estimates the country needs about $4 billion (around Sh520 billion) annually to meet its infrastructure needs.

The new fund aims to unlock long-term domestic capital and accelerate projects while reducing debt exposure and currency risks.

If successful, the model could reshape how Kenya finances major infrastructure projects over the next decade.