BENARD CHITUNGA: My thoughts on Kenya’s National Infrastructure Fund

No doubt on any scale this is a bold ambition put forth by H.E Dr. William Samoei Ruto and the Kenya government.

From the onset any ambition (small or big) must be anchored/backed by professionalism, innovation and integrity..

Raising about USD 40 billion/Kshs 5 Trillion over seven years to scale the country’s Infrastructure (roads, energy, dams etc) will require right signals to the markets and consistently.

With the fund envisaged to start with money from privatization proceeds and then attract much more from private investors, both local and international- Privatization process must be right.

Kenya can learn from some of the world’s most successful infrastructure funds:

1. Professional and Experienced Human Capital: India’s National Investment and Infrastructure Fund (NIIF) which seems to be a mode Kenya NIF borrows from with assets under management (AUM) of around USD 4.9 billion, is run by experienced professionals rather than anyone available. This builds trust within the capital markets. Kenya’s NIF cannot afford to get it wrong. Appoint skilled, independent leaders and male this work.
2. Faithful capitation by Privatizationproceeds: NIIF started with a USD 3 billion government commitment, which encouraged private investors like ADIA and Temasek to join, helping the fund grow to USD 4.9 billion.
3. National Infrastructure Fund should envisage mini special/Trust Funds for sectors within Main Fund: Global giants like Brookfield and Macquarie Asset Management managing trillions of dollars worldwide run on this model. This is a best practice especially when you want to leverage various partners with different interests and risk appetites.
4. A Focus on Ready-to-Go Projects : Bankability will be key to push top projects financing. Either the fund must have a strong arm for project preparation or at its roll out it should go for projects whose project preparation elements have been done.
5. From the word go- NIF must endeavor Partnering with Global Investors: Temasek Holdings in Singapore has a net portfolio of about SGD 434 billion (over USD 320 billion), and Mubadala Investment Company in the UAE manages over USD 280 billion. Both have built strong global partnerships to attract investment and expertise. This is where the Kshs 5 Trillion should come from.
6. The Fund’s Board and her CEO must have an aligned Long-Term Vision and Sustainability.. Successful global funds like Temasek and NIIF focus on projects that deliver steady, long-term returns and support sustainability. Kenya’s NIF should also prioritize climate-friendly and resilient infrastructure to attract more funding and deliver lasting benefits.

We as Kenyan citizens can only desire a National Infrastructure Fund to succeed. Learning from some of the successful funds and best practices it can build credibility, attract the funding needed, and deliver real improvements for people across the country.

The author, Dr Ben Chitunga, PhD, is the Chancellor of Cooperative University of Kenya.