Kenyan lawmakers are deliberating a groundbreaking National Infrastructure Fund Bill aimed at raising KES 5 trillion through private capital, seeking to wean the country off crippling public debt.

The Kenyan National Assembly has initiated critical debates on the National Infrastructure Fund Bill, 2026, a legislative framework poised to fundamentally restructure how the country finances its mega-projects.

Driven by Majority Leader Kimani Ichung'wah, the proposed fund is designed to mobilize private financing and commercialise state assets. If enacted, it could shield key sectors like transport and energy from political cycles while alleviating a sovereign debt crisis that has choked national development.

A Paradigm Shift in Financing

For decades, Kenya's rapid infrastructure expansion has been heavily reliant on expensive sovereign borrowing and aggressive taxation. The resulting debt burden has heavily constrained the national budget, prompting the government to explore alternative financing models. The National Infrastructure Fund (NIF) proposes a radical departure from this norm by establishing a state-backed corporate entity capable of attracting private and alternative investments independent of the exchequer.

The target is ambitious: mobilizing up to KES 5 trillion to fast-track commercially viable projects. Earmarked beneficiaries include the Loosuk–Lessos power transmission line, the Galana-Kulalu irrigation project, the Rironi–Naivasha–Mau Summit highway, and the crucial extension of the Standard Gauge Railway (SGR) to Malaba. President William Ruto has been explicit that future phases of the SGR should not be funded through sovereign loans, making the NIF a central pillar of the administration's economic strategy.

Structural and Governance Debates

Despite its progressive intent, the bill has sparked intense debate over its governance architecture. The proposal seeks to establish the NIF as a privately incorporated limited liability company rather than a direct government department. Proponents, including governance experts, argue this corporate model aligns with global best practices, insulating the fund from bureaucratic inefficiencies and political interference.

However, key oversight bodies have raised red flags. Auditor General Nancy Gathungu and Controller of Budget (CoB) Margaret Nyakang'o warned the National Assembly's Finance and National Planning Committee about potential constitutional headwinds. The establishment of the Fund outside the traditional strictures of the Public Finance Management Act could expose taxpayers to unforeseen financial risks and bypass established legal guardrails.

• Target Capitalization: KES 5 trillion for nationwide mega-projects.
• Governance Structure: Independent Board of Directors and CEO, distinct from traditional ministries.
• Key Projects: SGR extension to Malaba, Galana-Kulalu irrigation, major highway expansions.
• Oversight Concerns: Potential misalignment with the Controller of Budget's mandate to authorize withdrawals.

Gathungu pointed out a structural paradox: while the NIF's stated objective is to reduce reliance on public debt, certain clauses seemingly prioritize debt as a primary financing strategy, raising fears that borrowing might simply migrate to a new vehicle rather than being displaced entirely.

Public Participation and Safeguards

During public hearings at the Kenyatta International Convention Centre (KICC), citizens and stakeholders expressed cautious optimism. Many described the Fund as a necessary evolution for a modernizing economy but emphasized the absolute necessity of robust safeguards. Citizens urged lawmakers to implement strict capital thresholds—such as restricting the fund to projects exceeding KES 50 billion—to prevent micro-level mismanagement and ensure focus remains on transformative national assets.

The consensus among economic analysts is that the success of the NIF will depend entirely on meritocracy and transparency. The corporate model can work, provided there is zero tolerance for corruption and the fund's leadership is rigorously vetted and held strictly accountable to the public through regular, detailed disclosures.

"What is critical is meritocracy in board and management appointments, and remaining true to the mandate for which the Fund is established," noted an international governance expert advocating for the bill.