The Cabinet has approved the establishment of the National Infrastructure Fund and the Sovereign Wealth Fund, marking a significant policy shift aimed at financing Kenya’s long-term development and reducing reliance on debt and taxation.
According to a Cabinet dispatch issued on Monday, the two funds form part of a Sh5 trillion roadmap intended to transform Kenya into a first-world economy through an investment-led growth model anchored on domestic resource mobilisation and private capital.
“Kenya’s bold and ambitious KSh5 trillion roadmap to transform the nation into a first-world economy took a decisive step forward on Monday, following the Cabinet’s approval of the establishment of the National Infrastructure Fund and the Sovereign Wealth Fund,” the statement said.
The National Infrastructure Fund was approved as a limited liability company and will serve as the government’s central vehicle for aligning financial resources with national development priorities.
The fund will mobilise domestic resources, monetise mature public assets, deploy national savings and leverage capital markets to attract long-term private investment into priority infrastructure projects.
Under the new framework, all privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate long-term value.
The Cabinet said every shilling invested through the fund is expected to crowd in up to ten additional shillings from long-term investors, including pension funds, sovereign partners, private equity funds and development finance institutions.
“The Government will unlock large-scale private sector capital to finance priority investments while reducing reliance on borrowing and taxation,” the Cabinet noted.
The Cabinet also approved the Sovereign Wealth Fund Policy, establishing a framework for the prudent management and investment of revenues from mineral and petroleum resources, dividends from public investments and a portion of privatisation proceeds.
The fund will be anchored on inter-generational savings, protection against external economic shocks and strategic investments with commercial returns.
According to the Cabinet, the Sovereign Wealth Fund operationalises Article 201 of the Constitution on inter-generational equity and advances the Kenya Kwanza administration’s investment-led growth agenda.
The fund is expected to strengthen fiscal discipline, enhance economic resilience and support long-term national competitiveness.
Together, the two funds will finance priority programmes aimed at strengthening food security, expanding transport and logistics infrastructure, and scaling up energy generation.
Planned interventions include large-scale irrigation through the construction of 50 mega dams, 200 mini-dams and more than 1,000 micro-dams, bringing an additional 2.5 million acres under production.
Transport investments will include the dualling of 2,500 kilometres of highways, tarmacking of 28,000 kilometres of roads, extension of the Standard Gauge Railway to Malaba, expansion of regional oil pipelines, and modernisation of airports and the ports of Mombasa and Lamu.
The Cabinet also said energy generation capacity will be increased by at least 10,000 megawatts over the next seven years, drawing on geothermal, hydro, solar, wind and nuclear sources to support industrialisation, digital expansion and emerging technologies.
Both funds will be professionally and independently managed under defined governance, transparency and accountability frameworks.
The National Infrastructure Fund will be overseen by a competitively appointed board and chief executive officer, while the Sovereign Wealth Fund will operate under a robust policy framework to ensure prudent investment and inter-generational equity.
The Cabinet said the new financing architecture represents a decisive shift toward a sustainable development model focused on mobilising capital, accelerating delivery and preserving national value for current and future generations.
