The National Assembly has passed the National Infrastructure Fund (NIF) Bill, 2026, a major legislative step that aims to transform how Kenya finances large-scale development projects by shifting from heavy borrowing to investment-driven funding.
The Bill, approved on Thursday evening after extensive debate, seeks to mobilise nearly KSh5 trillion over the next decade to finance strategic infrastructure across the country. Lawmakers and government officials say the new framework will accelerate economic growth and help position Kenya among the world’s advanced economies.
The proposed law establishes the National Infrastructure Fund, which will pool resources to finance major projects in sectors such as transport, energy, water, irrigation, agribusiness infrastructure and digital connectivity.
Shift from debt to investment
For decades, Kenya has relied heavily on loans to finance infrastructure projects such as highways, railways and energy systems. The new fund is designed to change this model by attracting both public and private sector investment into critical national projects.
Supporters of the Bill say the approach will reduce pressure on public debt while ensuring sustained financing for key development programmes.
Majority Leader Kimani Ichung’wah described the Bill as one of the most important laws passed by Parliament since independence.
“This is the most consequential piece of legislation ever passed by this House. In fact, since the approval of the 1965 Sessional Paper No. 10, I believe this is the second most important legislation ever enacted,” Ichung’wah told MPs.
He added that the multi-trillion-shilling fund would play a central role in transforming Kenya’s economic future.
Stronger oversight and governance
Although the Bill received broad support in Parliament, several lawmakers raised concerns about potential misuse of funds and excessive influence from the Executive, particularly the Treasury Cabinet Secretary.
In response, the Departmental Committee on Finance and National Planning introduced several amendments aimed at strengthening transparency and oversight.
One key amendment establishes a Governing Council responsible for providing strategic direction and safeguarding the fund’s assets.
The council will be chaired by the Treasury Cabinet Secretary and include senior officials such as the Central Bank Governor and the Attorney General. Six additional members from the private sector with expertise in finance or public policy will also serve on the council for three-year terms.
The council will oversee the investment policy and appoint the board of directors but will not be involved in day-to-day management, ensuring operational independence.
Professional board and management
The legislation also introduces reforms to the Board of Directors, aimed at protecting the fund from political interference.
Under the new framework, four independent board members will be competitively recruited by the Governing Council. These members must possess professional qualifications in fields such as finance, engineering or law and have at least ten years of professional experience.
Strict integrity requirements have also been introduced. Individuals serving on other state corporation boards or those with certain criminal convictions will be disqualified from serving.
The role of the Chief Executive Officer will also expand to include that of the Fund Administrator, creating a streamlined reporting structure to enhance efficiency.
Enhanced parliamentary oversight
Parliament also secured a greater role in supervising how the fund will be managed.
Under the amendments, the Treasury Cabinet Secretary must submit the Fund’s Investment Policy to the National Assembly for approval. Lawmakers will have 90 days to approve, amend or reject the policy.
This measure was introduced following concerns raised during public participation and parliamentary debate about ensuring accountability in the management of the large pool of resources.
Tough penalties for misuse
To safeguard the fund from corruption or misuse, the Bill includes strict penalties for anyone found misappropriating resources.
The law states that individuals convicted of misusing funds will be required to repay twice the amount stolen, pay a fine of at least KSh10 million, or face a minimum prison sentence of five years.
Ichung’wah defended the tough measures, arguing they were necessary to protect public resources.
“If you do not want to be subjected to these penalties, do not attempt to misappropriate this Fund,” he told the House.
Financing strategic infrastructure
The National Infrastructure Fund will support financing for key national projects including highways, railway networks, airports, seaports, and energy infrastructure such as electricity generation and transmission.
The fund will draw revenue from various sources, including proceeds from privatisation and the sale of shares in government-linked corporations.
Lawmakers also removed clauses overlapping with the Public Private Partnership (PPP) Act, ensuring the new fund focuses on strategic commercial investment while leaving project preparation responsibilities to the PPP Directorate.
Following the passage of the Bill, Ichung’wah expressed optimism that the legislation will help propel Kenya toward greater economic prosperity.
“The journey to Singapore has been crystallized,” he said. “We have now put the roadmap to the first world.”
The Bill now awaits presidential assent before it becomes law.
