A Treasury plan to reassign Sh45.9 billion worth of energy development projects to the newly established National Infrastructure Fund has triggered sharp scrutiny from members of the National Assembly Energy Committee, who questioned the legality, timing, and technical soundness of the move during a tense budget review session.
The discussion unfolded at County Hall, Parliament Buildings on Monday, where National Treasury Cabinet Secretary John Mbadi appeared before lawmakers together with accounting officers from the State Departments for Energy and Petroleum to defend the proposed restructuring of project financing.
At the centre of the debate is Treasury’s proposal to remove selected energy projects from the traditional budget framework and place them under the National Infrastructure Fund, a model designed to blend public and private capital for faster infrastructure rollout.
CS Mbadi told the committee that the shift is intended to ease pressure on the national budget and allow more self-reliant financing among state agencies involved in commercially viable projects.
“One way of freeing the budget is to look at some of these projects that are commercially viable and take them off the budget,” Mbadi told the committee. “The current budget is so rigid that essential services are being squeezed.”
Treasury further argued that agencies such as KenGen and KETRACO have the capacity to increasingly fund their own capital investments, reducing dependence on direct exchequer support.
However, the explanation drew immediate resistance from committee members, who warned that the proposed changes could weaken technical oversight in a sector that requires specialised engineering expertise.
MP Julius Mawathe (Embakasi South) questioned whether Treasury is best placed to supervise energy projects that traditionally fall under technical institutions.
“You are moving it from the people who have the knowledge — the engineers who have the capacity and experience of knowing the viability of a project — and bringing it to Treasury,” said Hon. Mawathe. “You may end up with people who are good at maths making decisions on projects that require technical sector knowledge.”
Concerns were also raised about the possible strain on energy agencies if development funding is withdrawn while operational obligations remain unchanged.
MP Geoffrey Mulanya (Nambale) warned that such a move could leave key institutions with limited capacity to deliver their mandates effectively.
“You are saying you are freeing the budget by cutting money from key sectors,” Hon Mulanya said. “KETRACO is supposed to build new substations, but we still pay operational costs. So are we going to pay people to read newspapers in office?”
Committee leaders also pressed Treasury on the timing of the proposal, arguing that the revised estimates introduced major changes that had not been reflected in earlier budget documents already reviewed by Parliament.
MP David Gikaria (Nakuru Town East) said the committee needed clarity before the budget process proceeds further.
“We are hoping today we will be able to finalise the issues we had so that we can retrieve this, make a report, and do so before the budgetary presentation tomorrow,” Gikaria said.
Vice Chairperson, MP Lemanken Aramat (Narok East) further questioned whether the reallocation complied with legal requirements under public finance management rules, warning that procedural gaps could undermine the credibility of the process.
“What I’m worried about is whether Treasury has really followed its due course in doing what they are doing,” MP Aramat said. “And if not, how do we regularise this so that we don’t find these cuts misplaced?”
In defence of the proposal, Hon. Mbadi assured the committee that essential programmes would remain protected, adding that the Last Mile Connectivity Programme will be moved to the Rural Electrification and Renewable Energy Corporation (REREC) to ensure uninterrupted service delivery.