NAIROBI, Dec 16 – Kenya’s cabinet has approved the establishment of an infrastructure fund and a sovereign wealth fund to finance priority projects such as roads and power plants, while easing pressure on public borrowing, the government said on Monday.
President William Ruto said in October that the infrastructure fund would support investment in key sectors without pushing public debt to levels that have strained the country’s finances over the past decade.
“Both funds will be professionally and independently managed under clear governance, transparency and accountability frameworks,” the cabinet said in a statement. The funds will be open to a broad range of investors, including pension funds, sovereign partners, private equity firms and development finance institutions, alongside government capital.
Kenya has one of the highest debt-service-to-revenue ratios in Africa after years of heavy borrowing to fund large-scale infrastructure projects. Earlier this month, Finance Minister John Mbadi said proceeds from the government’s planned sale of a 15% stake in telecoms firm Safaricom would provide initial capital for the two funds.
Additional funding is expected to come from a proposed share sale in state-owned Kenya Pipeline Company, which operates petroleum transport infrastructure within Kenya and across neighbouring countries.
The funds will also support expansion of electricity generation. Kenya currently has about 2,300 megawatts of installed capacity but needs at least 10,000 megawatts to meet its industrialisation goals, President Ruto said in October.
