Kenya is poised to establish a transformative national infrastructure fund designed to finance major development projects including roads, dams, and power generation facilities, in a strategic pivot that will substantially reduce the country’s reliance on external borrowing while ensuring sustainable, locally-financed development that addresses critical infrastructure gaps constraining economic growth.
Raising sufficient funds for major infrastructure projects through conventional mechanisms—primarily external borrowing from multilateral development banks, bilateral creditors, and commercial bond markets—has become increasingly difficult as Kenya’s debt burden soars and global financial conditions tighten with rising interest rates.
On Monday, December 15, 2025, Cabinet gave the Green-light for the establishment of a National Infrastructure Fund, officially endorsing Kenya-Kwanza administration's move to explore innovative local financing mechanisms that can mobilize domestic capital for infrastructure investment while reducing vulnerability to external creditors, currency fluctuations, and the conditionalities that often accompany international lending.
Establishing a dedicated infrastructure fund signals the administration’s recognition that traditional funding models have proven inadequate for the nation’s ambitious development agenda.
According to a Cabinet Dispatch, the infrastructure fund will help the government systematically tackle persistent funding gaps that have stalled numerous critical development projects across multiple sectors, leaving partially completed roads, unfinished water systems, and delayed power generation facilities that represent wasted resources and unfulfilled promises to citizens.
The National Infrastructure Fund will operate as a limited liability company and serve as the central engine for aligning financial resources with national development priorities. According to the Cabinet, the Fund will mobilise domestic resources, monetise mature public assets, deploy national savings, and attract private sector investment.
All privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate long-term value. Each shilling invested is expected to crowd in up to ten shillings from long-term investors, including pension funds, private equity funds, sovereign partners, and development finance institutions.
“Under the new framework, all privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate and preserve long-term value. Every shilling invested through the Fund is expected to crowd in up to KSh10 additional shillings from long-term investors, including pension funds, sovereign partners, private equity funds and development finance institutions,” reads in part the Cabinet's presser released on Monday, December 15.
The Cabinet said the fund will be professionally and independently managed under clear governance, transparency, and accountability frameworks. It will be overseen by a competitively appointed board and CEO.
Accountability Red Flag
The roll-out of the fund, comes amid criticism. Justifying the need to establish the fund, President Ruto dismissed opposition criticism, stating that the government plans to build 28,000 kilometres of roads by 2032, adding to the 10,000 kilometres constructed under Uhuru.
“Vile tulijenga 10,000 in ten years ya Uhuru Kenyatta, we are going to build another 28,000 by 2032. Ndio hizi barabara zenu zote ambazo ziko hapa tuweze kuzikamilisha, ndio mambo iweze kusonga mbele,” Ruto said on Sunday, December 14.
However, on Monday, December 15, Kiharu Member of Parliament (MP) Ndindi Nyoro, challenged President Ruto’s assertion that the government constructed 10,000 kilometres of roads from 2013, stating the numbers do not match reality and questioned the government’s record of accountability.
"Kenya has borrowed close to four trillion shillings in the last three years and two months. And according to the rules of Kenya, the money we borrow should go directly into capital expenditure, which is development,” Nyoro said.
He argued that before launching new trillion-shilling infrastructure plans, the government must first account for the money already borrowed.
“Before we talk about trillion-shilling plans and funds, it is important we put into context for Kenyans that you have already borrowed four trillion shillings, and Kenyans deserve that money to be accounted for,” Nyoro added.
Nyoro provided context, noting that if the four trillion shillings had been properly allocated, basic and tertiary education could have been made free. Further, he claimed, the remaining funds could have delivered roads, water, electricity, and irrigation projects across all 290 constituencies.
“12 billion worth in every constituency means a hundred kilometres of road in every constituency in Kenya at 70 million per kilometre. That is highway standards,” he said.
He also cited a one billion-shilling water project, a one billion-shilling irrigation project, and over 200 completed electricity schemes that should have been delivered by now.
Nyoro further disputed the claim that 10,000 kilometres of roads were built from 2013, saying, "You know, we keep saying that 10,000 kilometers of roads were constructed from 2013. That is incorrect, and I would challenge the government to actually tabulate the roads that we keep hearing of, 10,000 kilometers of roads, because I know and I have the data. It is less than a third of that, and I also want to put it very clearly, and anyone with a conflicting fact can table them. It is less than 1,200 kilometers of tarmac road we have built from 2012 to today, out of newly signed contracts.”
Nyoro also clarified that ongoing road projects, stadiums, and programmes like NYOTA are funded through other loans or World Bank support and are separate from the four trillion shillings borrowed.
Nyoro concluded by calling for greater transparency, “Kenyans deserve to know, before you tell us about trillion funds that you want to launch, can we first account for the four trillion Kenya shillings the country has borrowed in the recent past?”
Conclusion: Financing Kenya’s Development Ambitions
The national infrastructure fund represents one of the most ambitious attempts to address Kenya’s infrastructure financing challenge through domestic resource mobilization rather than continued accumulation of external debt. Success will depend on multiple factors including securing adequate initial capitalization, establishing robust governance preventing political interference and corruption, developing professional project selection and management capabilities, and maintaining political consensus across administrations.
If implemented effectively with strong institutional safeguards and professional management, the fund could transform Kenya’s development trajectory by ensuring predictable, adequate financing for priority projects, completing the backlog of stalled infrastructure, and positioning Kenya for the accelerated economic growth that quality infrastructure enables. However, if mismanaged through poor project selection, inadequate oversight, or corruption, the infrastructure fund risks becoming another mechanism for resource misallocation rather than solution to Kenya’s infrastructure deficit.
