Kenya Proposes KSh 5 Trillion Infrastructure Fund Without Sovereign Borrowing
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Treasury Cabinet Secretary John Mbadi champions the fund as a structural shift from tax-and-borrow development. Financing occurs strictly at project level via equity/structured debt tied to bankable initiatives, preventing off-balance sheet state liabilities.
Target sectors span national highways (Thika Road dualling), rail (Athi River-Namanga), JKIA modernization, power generation/transmission, water reservoirs, irrigation, agribusiness infrastructure. Commercial viability tests and minimal government guarantees safeguard fiscal discipline.
Seed capital ties to politically sensitive Safaricom stake divestiture; MPs question Vodacom sale vs NSE local listing, potential foreign control of strategic assets. Mbadi defends strategic premium pricing over public discount.
Governance mandates independent chair/four directors (15+ years experience), disqualifying recent government/political affiliates. Treasury CS and CEO serve ex-officio; development bank experts included.
Model mirrors Singapore Temasek/Malaysia Khazanah asset-recycling but remains domestic infrastructure-only—no global diversification, no sovereign wealth mandate. Returns reinvested to compound capital versus exchequer draws.
Recent fiscal data underscores urgency: 7 months into FY, development spending hit 41.2% target (KSh 167.8bn vs KSh 407.1bn planned) while debt service consumed KSh 1.075trn, recurrent KSh 885.7bn. Fund aims capital-markets pivot.
