The National Infrastructure Fund (NIF) has begun investing parts of its Ksh340 billion seed capital in government bonds, according to the latest disclosure by the Chief Executive Officer, James Mworia.

🇰🇪 Breaking It Down

According to reporting from Reuters , the fund CEO expects that investing the funds will generate about Ksh42 billion a year, while the underlying capital remains intact.

The fund, created as a new model for financing major roads, energy, water, and digital projects without relying entirely on fresh government borrowing, is expected to invest in various projects, including the expansion of the Jomo Kenyatta International Airport (JKIA).

Mworia on Wednesday, October 7, told Reuters that the investments had already begun in July and that the fund is now expected to inject liquidity into the domestic financial market, freeing up commercial banks to increase lending to businesses and households.

📌 What You Need to Know

“The fund’s entry into the bond market will therefore provide a liquidity boost to other parts of the economy as the banks try to redirect some of their funds into the private-sector borrower,” Mworia stated.

There have been concerns about the government's long-standing reliance on the local market to finance budget shortfalls, which banks often prefer. This reduces the funds available for Kenyans to borrow, as banks favour government securities.

The NIF was initially announced by President William Ruto back in October 2025, as part of efforts to finance infrastructure d evelopment without adding any pressure to the government finances.

It took effect this year, with initial capital from the sale of Kenya Pipeline Company shares in the first of a series of parastal divestitures.

“The fund was created based on the high debt service costs, rising social needs and limited room for increasing taxes, while the country continues to face major infrastructure financing gaps,” Mworia added.

He added that the fund expects to utilise all of the Ksh340 billion by the end of the current financial year, June 2027, with the hope that it will attract additional funding from local and international investors.

📰 Source: Kenyans.co.ke