Kenya’s cabinet has approved plans to establish both an infrastructure fund and a sovereign wealth fund as part of efforts to finance large-scale projects while reducing pressure on public borrowing. The funds are expected to support priority investments such as roads, power generation and other critical infrastructure without further straining government finances.
President William Ruto previously outlined that the infrastructure fund would channel capital into key sectors without adding to the country’s rising debt burden, which has increased sharply following years of heavy infrastructure spending. The cabinet confirmed that both vehicles will operate under professional and independent management structures, supported by clear governance, transparency and accountability frameworks.
In addition to government capital, the funds will be open to a broad pool of investors, including pension funds, sovereign partners, private equity firms and development finance institutions. Kenya currently has one of the highest debt-service-to-revenue ratios in Africa, highlighting the need for alternative financing mechanisms.
Initial capital for the funds is expected to come from the planned sale of a 15% stake in telecoms firm Safaricom, alongside proceeds from a proposed share sale in state-owned Kenya Pipeline Company, which oversees petroleum transport infrastructure across Kenya and neighboring countries.
The funds will also play a role in expanding electricity generation capacity. Kenya currently has around 2,300 megawatts of installed power capacity, but estimates suggest at least 10,000 megawatts will be required to support long-term industrialisation goals.
Source: Reuters
