Govt launches Ksh5T development funds
By Kenneth Mwenda, December 15, 2025Kenya has taken a major step in its long-term development strategy after the Cabinet approved the establishment of the National Infrastructure Fund (NIF) and the Sovereign Wealth Fund (SWF).
Together, the funds form part of the government’s Ksh5 trillion plan to transform Kenya’s economy.
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,” the press release on Monday, December 15, 2025, read.
The Sovereign Wealth Fund will manage revenues from mineral and petroleum resources, dividends from public investments, and a portion of privatisation proceeds. It will focus on inter-generational savings, protection against external shocks, and strategic investments with commercial returns. The fund also operationalises Article 201 of the Constitution on inter-generational equity.
Together, the two funds will support Kenya’s transformation agenda, which includes large-scale modern irrigation, expansion of transport and logistics infrastructure, and scaling up energy generation. The government plans to construct 50 mega dams, 200 mini-dams, and more than 1,000 micro-dams, adding 2.5 million acres to productive land.
Roads and highways will be upgraded, with 28,000 kilometres of tarmacked roads and 2,500 kilometres of dual carriageways planned. The Standard Gauge Railway will be extended to Malaba, regional oil pipelines expanded, and ports and airports modernised.
Energy generation will increase by at least 10,000 megawatts over seven years, drawing on geothermal, hydro, solar, wind, and nuclear sources to support manufacturing, digital expansion, and industrialisation.
Ruto defends plan amid criticism
President William Ruto defended the initiative, saying it was realistic and necessary for growth.
“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,” he said while speaking on Sunday at AIPCA Gatundu.
However, the plan has attracted criticism. Kiharu MP Ndindi Nyoro has 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 has also disputed the claim that 10,000 kilometres of roads were built from 2013.
“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,” he said.
The Cabinet said both funds will be professionally and independently managed under clear governance, transparency, and accountability frameworks. The NIF will be overseen by a competitively appointed board and CEO, while the SWF will operate under a robust policy framework.
The government has also approved the National Energy Policy, National Petroleum Policy, financing for priority transport projects, the National Integrated Security Command and Control System, rollout of Second-Generation Smart Driving Licences, the Livestock Value Chain Support Project, and the National Care Policy.