President William Ruto has assented to the National Infrastructure Fund Bill, paving the way for a new financing model aimed at supporting large-scale development projects across the country.

The law, signed at State House Nairobi, establishes the National Infrastructure Fund, a financing mechanism intended to mobilise capital for major projects such as roads, railways, ports, energy systems, housing and irrigation.

According to the government, the fund will enable Kenya to raise long-term investment from domestic sources, including pension funds, institutional investors and proceeds from the privatisation of selected state-owned assets. The initiative is designed to reduce the country’s dependence on external borrowing while accelerating infrastructure development.

President Ruto said Kenya requires approximately $4 billion annually to meet its infrastructure needs, a gap that has traditionally been filled through foreign loans.

The new framework seeks to address this by tapping into local savings and investment pools, while also mitigating risks associated with external debt, including currency fluctuations and rising borrowing costs.

The fund is expected to receive its initial capital from the proceeds of the initial public offering of Kenya Pipeline Company, which raised about Sh106 billion. The government intends to use this base capital to mobilise as much as Sh1.2 trillion for infrastructure development.

Officials say the fund will operate under a structured governance system, including oversight by a governing council and parliamentary supervision, to ensure transparency and accountability in the management of the resources.

Ruto noted that the new financing model will allow the government to expand investment in critical infrastructure while supporting the country’s long-term economic transformation.