The Head of State has assented to the National Infrastructure Fund Bill, 2026, paving the way for a new financing framework expected to unlock billions of shillings for the development of critical national infrastructure while reducing Kenya’s reliance on public debt.

The Act, sponsored by Leader of the Majority, Hon. Kimani Ichung’wah, sailed through the National Assembly after being published on January 23, 2026 and undergoing debate and amendments by Members of Parliament. The Bill was read for the First Time on February 12, passed its Second Reading on March 3, and was approved at the Committee of the Whole House on March 5 before being transmitted to the President for assent.

The new law is the establishment of the National Infrastructure Fund, a strategic investment vehicle designed to mobilise capital from non-traditional sources such as domestic pension funds, collective investment schemes, sovereign wealth funds and climate finance institutions.

Government officials say the fund marks a significant shift in how Kenya finances large development projects. Instead of relying heavily on borrowing, the country will now tap into private investment to support commercially viable infrastructure.

The Fund will support major projects classified as national infrastructure, including highways, railway networks, airports, seaports and electricity generation, transmission and distribution systems. These projects are considered critical for enhancing connectivity, trade and economic growth.

The law also introduces a two-tier governance structure to ensure accountability and professional management of the Fund. A Governing Council will provide overall policy direction, while a Board of Directors will be responsible for implementing the investment policy and approving funding for infrastructure projects.

Under the legislation, the Governing Council will develop an Investment Policy valid for five years, outlining priority sectors, proposed projects, expected rates of return and exposure limits for different sectors. The Board will then prepare a detailed business plan and oversee implementation, including undertaking feasibility studies to confirm that proposed projects are commercially viable.

Importantly, the National Assembly retains an oversight role through the approval of the Investment Policy. Lawmakers say this provision ensures transparency and guarantees that projects funded through the initiative align with Kenya’s national development priorities.

Funding for the new vehicle will be drawn from proceeds of privatisation, the sale of shares in government-linked corporations and returns generated from investments undertaken by the Fund.

The law also prescribes strict penalties for misappropriation of funds or assets, signalling Parliament’s intention to safeguard public and investor resources.