The National Assembly recently published the National Infrastructure Fund Bill, 2026 (the Bill). The Bill is sponsored by the Leader of the Majority Party, Hon. Kimani Ichung’wah, and seeks to establish the National Infrastructure Fund (the Fund). The object of the Bill is to provide a legal framework for the establishment, management, governance, and oversight of the Fund.  

Purpose of the Fund  

The Fund establishes a structured, sustainable mechanism for financing critical national development projects. The purpose of the Fund is to accelerate the development of catalytic national infrastructure while reducing reliance on public debt. The Fund seeks to mobilise private capital and other non-traditional sources of infrastructure financing, including domestic institutional investors such as pension funds and collective investment schemes. It is also intended to strengthen Kenya’s national capacity to structure and execute large and complex infrastructure projects. The Fund will primarily focus on commercially viable investments capable of generating sustainable returns.  

Governance  

The Fund will be legally established and designed to operate under professional management and sound governance structures, ensuring efficiency, accountability, and financial discipline. It shall be governed and managed by a Board of Directors constituted to reflect independence, professional competence, and institutional accountability. The Board shall comprise a chairperson who shall serve as an independent director, the Cabinet Secretary to the National Treasury or a representative designated in writing, four additional independent directors, two directors with proven experience in senior leadership roles within development banking, and the Chief Executive Officer, who shall serve as an ex officio member. The tenure of the Board of Directors shall be three years, renewable once.  

The Fund’s governance framework emphasises integrity, independence, and expertise, ensuring that Board members possess substantial leadership experience and relevant professional qualifications while minimising conflicts of interest. To uphold transparency and merit-based selection, the independent directors, including those with development banking expertise, shall be recruited through a competitive process and will enter into performance contracts with the Cabinet Secretary in accordance with the Government Owned Enterprises Act, 2025.  

The Board of Directors will be responsible for setting the Fund’s strategic direction and ensuring proper governance. Its responsibilities include mobilising resources, approving investments, overseeing risk management systems, establishing internal controls, approving budgets, and appointing the Chief Executive Officer.  

Disqualifications on Appointment  

The Bill sets clear restrictions on who may not be appointed as an independent director to ensure integrity and prevent conflicts of interest. Individuals with recent political affiliations, government employment, or who ensure responsible management of public resources or conflicting professional interests are disqualified from serving as independent directors. These safeguards are designed to maintain an independent, objective, and professionally governed Board. The Board will play a central role in safeguarding the Fund’s financial sustainability and operational effectiveness.  

Project Preparation  

The Bill requires that thorough feasibility studies and project evaluations support all investment decisions. Each project must be assessed for technical feasibility, commercial viability, legal compliance, social impact, environmental sustainability, and value for money. These safeguards are intended to ensure that investments are economically sound and aligned with national development priorities.  

Government Support  

Where appropriate, the Bill provides that the Government may provide support measures to enhance the bankability of projects. Such support may include guarantees, letters of credit, or other risk mitigation instruments. These measures are designed to reduce investment risks and attract private sector participation while remaining consistent with public finance management laws. Additionally, the Bill provides that the Fund’s expenditure and commitments must not exceed its income, and that surplus funds may be invested only in secure instruments, such as government securities.  

Audit Reports  

The Bill provides strong mechanisms for transparency and accountability. The Board is mandated to keep financial records and have an audit committee. The Fund must prepare quarterly and annual reports, publish audited financial statements, and disclose key operational information.  

Policy Perspective  

The Bill comes at a critical time, when the government is disposing of its critical assets, such as shares, and privatising critical state-owned entities. The Fund will ensure that these proceeds are ringfenced for the intended purposes, including the development of critical projects such as airports and seaports, electricity generation, transmission, and distribution, water reservoirs, irrigation, national highways, and railway networks, among others.  

This Fund ringfences proceeds of key government transactions and should provide the public with confidence and enhance accountability.