Parliament’s Departmental Committee on Finance and National Planning has recommended a near-total rewrite of the policy that tells the National Infrastructure Fund board which projects it may put money into. The committee, chaired by Molo MP Kuria Kimani, says the document does not say enough about how project risk is assessed, how projects are picked and ranked, how much the Fund may borrow, how much cash it keeps liquid, how the portfolio is split, how exposure is capped, or how any of it is monitored.
The National Infrastructure Fund, or NIF, is a state investment company created by the National Infrastructure Fund Act, 2026, which President William Ruto assented to on 9th March. It is not a budget line. It buys stakes in infrastructure projects that are supposed to earn money, so that the government can build without borrowing more or taxing more. The Act requires the Treasury to put an investment policy before the National Assembly, and that policy is Sessional Paper No. 7 of 2026, tabled by Treasury Cabinet Secretary John Mbadi.
The Fund currently holds KES 340 billion. That is money from two sales we have covered all year: the government’s 15 per cent Safaricom stake, which went to Vodafone Kenya on 30 June and brought the Treasury about KES 244.5 billion, and its 65 per cent stake in Kenya Pipeline Company, sold at KES 9 a share in an IPO that needed a deadline extension to get over the line. Most of that money came from Safaricom. Treasury wants it to reach KES 5 trillion once private money is layered on top.
ICT is one of the five sectors
The policy lists five sectors the Fund may invest in. Transport covers highways, railways, airports, seaports and logistics. Energy covers generation, transmission and distribution. ICT covers telecommunications, fibre, cloud and data centres. The other two are water and irrigation, and agriculture and livestock.
So the money that came out of Kenya’s largest telco can legally go back into fibre and data centres. Whether it does depends on rules the committee says are unfinished. The projects officials have floated in public so far are the dualling of Thika Road, the Athi River to Namanga expansion and the JKIA upgrade. Every one of those is transport.
The guardrails as written
Mbadi’s policy sets numbers. No single sector may take more than 40 per cent of the Fund. No single project may take more than 20 per cent, which at KES 340 billion is a ceiling of KES 68 billion on one project, a figure Mbadi gave the committee himself on 20 August. Projects backed with equity must be able to return at least 7 per cent a year on the Fund’s stake. At least 60 per cent of a project’s capital must come from non-recourse debt. If a project collapses, its lenders can only go after the company built around that project, and the rest of the Fund stays out of reach. The Fund itself is barred from borrowing against its own balance sheet.
James Mworia, the Centum chief executive who sits on the NIF board, told MPs that the most the Fund can lose on any project is the equity it put into that project’s special purpose vehicle.
What the committee says is missing
Kimani’s committee held public participation with investment bankers and fund managers, and came back with a list.
On risk, it wants the paper amended to require every project to comply with the Fund’s risk management framework under section 25(4) of the Act, and to show it has assessed financial, construction and completion, operational, user demand, legal and regulatory, environmental and socio-political risks, plus foreign exchange and interest rate risk.
“Infrastructure investments are exposed to multiple and interconnected risks that may affect project costs, completion, revenues, operations, debt repayment, and ultimately the Fund’s expected returns,” Kimani said.
On demand, the committee wants the paper to require proof that the people who will use a road, a pipe or a fibre link can actually pay for it, and will. Ability to pay and willingness to pay, both tested before the money goes out. In plain terms, someone has to work out whether Kenyans can afford the toll, the tariff or the monthly bill while the project is still on paper, because the 7 per cent return has to come from those bills.
On viability, it wants a minimum level of non-recourse debt a project must be able to carry, as an objective test of whether it is bankable. Where a project gets government support to make the numbers work, the committee wants the estimated contingent liabilities for the life of the project written down.
On conflicts, it wants every project appraisal and approval to come with a statement disclosing any actual, potential or perceived conflict of interest involving a public or state officer, under the Conflict of Interest Act.
The National Assembly approved Sessional Paper No. 7 on 1 September. Kimani set out the committee’s amendments when he moved debate on it.
The thing to watch is the first project the NIF board actually funds, and whether it passes the tests Mbadi described. Kimani has already asked the awkward question about that: how JKIA modernisation ended up inside the NIF when the Ministry of Transport had already awarded it to a contractor, who the other investors are, and what it costs. Mbadi’s answer to the committee was about process. Projects get feasibility studies, investment appraisal and board approval, and a project that cannot show a decent internal rate of return will not convince an investor. The policy runs for five years and must be reviewed annually, so the board’s first business plan is where the answer shows up.
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