Kenya’s National Infrastructure Fund Act, No. 4 of 2026 came into force on 25 March 2026, creating a new vehicle for financing the country’s roads, railways, ports, energy, water, and ICT infrastructure. The Fund sits under the National Treasury and is designed to draw in private capital, including pension funds, sovereign wealth funds, and climate finance, rather than relying on public borrowing. Its stated purpose is to accelerate infrastructure development, mobilise non-traditional sources of capital, reduce reliance on public debt for commercially viable projects, and build domestic capacity to originate and structure large infrastructure deals. Rather than the government simply spending money on infrastructure and writing it off, the Fund is meant to invest in projects that generate a return, recycle that return into new projects, and grow over time.
Governance is deliberately split in two. A Governing Council, chaired by the Cabinet Secretary for the National Treasury and including the Central Bank Governor, the Attorney-General, and six appointed members, sets strategic direction and approves the Investment Policy, but has no say over day-to-day operations. A Board of Directors, made up of four independent directors, three public officers, and the Chief Executive Officer, runs the Fund and makes investment decisions. This separation is meant to keep commercial decision-making at arm’s length from political direction, while Treasury remains accountable to Parliament through periodic reporting.
A few features are worth noting. The Fund cannot borrow against its own balance sheet, so it must rely on privatisation proceeds, share sales in government-linked corporations, and its own investment returns. Independent directors face an unusually detailed disqualification regime, ruling out recent government employees, anyone politically affiliated within the last five years, and anyone with conflicted commercial ties. The Investment Policy is the Fund’s central planning instrument, requiring Cabinet and parliamentary approval, running for five years, and setting out priority sectors, expected returns, and exposure limits. Additionally, the penalties for misappropriation are severe for example: repayment of double the amount misappropriated, plus a fine of at least ten million shillings or five years’ imprisonment, or both.
Having set out what the Act does, it is worth turning to where it falls short. The Fund is established in perpetuity, yet the Act says nothing about how it would ever be dissolved, merged, or wound up, or what would happen to its assets if that occurred. There is also no transitional clause addressing existing privatisation proceeds or projects that were already underway before the Fund took effect. The Fund’s tax status is left unstated, and although the Board is handed a genuinely commercial, risk-taking investment mandate, the Act provides no indemnity protection for directors carrying out that mandate in good faith. It is similarly unclear whether the Public Procurement and Asset Disposal Act govern how the Fund contracts, a significant gap given the scale of transactions envisaged.
The bigger gaps sit on the constitutional side. Several categories of infrastructure covered by the Act, including roads, water, and irrigation, overlap with functions devolved to county governments, yet counties have no formal consultation role. Public participation remains inadequate because, apart from publishing reports after decisions have already been made, there is no mechanism for the public to provide input before the Investment Policy or individual PPP projects are approved. Parliament’s oversight has a similar ceiling, since once the five-year Investment Policy is approved, individual project-level investments do not appear to come back before the National Assembly for review. The Act also leaves out whistleblower protection for staff who report wrongdoing, a cooling-off period restricting directors from moving into related private-sector roles once they leave the Board, and any built-in requirement for Parliament to review how the Act is working after a set number of years.
Addressing these gaps would mean tidying up the drafting itself, including the incomplete definitions, the missing constitutional reference, and inconsistent citations elsewhere in the Act, and then filling in the missing structural provisions around dissolution, transitional arrangements, tax treatment, and director indemnity. Procurement rules should be clarified, and the Act should build in a formal consultation role for county governments alongside a genuine public participation channel ahead of major decisions. Accountability could be strengthened further through whistleblower protection, a post-service cooling-off rule for directors, and a periodic statutory review clause.
The Fund’s governance model, which separates strategic oversight from operational decision-making, is a sound design choice. But the gaps around dissolution, taxation, devolution, and public participation are exactly the kind of thing that tends to surface later, in disputes, investor due diligence, or judicial review. We will be watching closely for the regulations envisaged under section 48, and for any amendment Parliament makes to close these gaps.