Cabinet approves Sh5 trillion strategy to expand roads, energy, agriculture and trade

The government has approved the creation of the National Infrastructure Fund and a Sovereign Wealth Fund, paving the way for a Sh5 trillion investment-led strategy aimed at transforming Kenya into a high-income economy.

In a Cabinet meeting chaired by President William Ruto on Monday, the government said the two funds will anchor long-term development by mobilising domestic capital, attracting private investment, and reducing reliance on debt.

The Cabinet approved the National Infrastructure Fund as a limited liability company, which will act as the central engine for aligning public financial resources with national development priorities.

Through innovative mobilisation of domestic resources, strategic monetisation of mature public assets, democratisation of ownership via capital markets, and deployment of national savings, the government aims to unlock large-scale private sector capital for priority investments while easing pressure on borrowing and taxation.

Privatisation proceeds ring-fenced

Under the new framework, all privatisation proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate and preserve long-term value. The government projects that every shilling invested through the Fund will attract up to Sh10 more from long-term investors, including pension funds, sovereign partners, private equity funds, and development finance institutions.

The Cabinet also approved the Sovereign Wealth Fund Policy, establishing a comprehensive framework for the prudent management and investment of revenues from mineral and petroleum resources, dividends from public investments, and a portion of privatisation proceeds through a dedicated national fund.

Inter-generational savings

The policy is anchored on inter-generational savings, protection against external shocks, and strategic investments with commercial returns, aiming to strengthen fiscal discipline, enhance economic resilience, and support long-term national competitiveness.

The Sovereign Wealth Fund framework operationalises Article 201 of the Constitution on inter-generational equity and advances the Kenya Kwanza administration’s investment-led growth agenda.

“Together, the Sovereign Wealth Fund and the National Infrastructure Fund will finance Kenya's transformation agenda focused on strengthening food security and positioning Kenya as a net-exporting economy, expanding modern transport and logistics to drive productivity and trade, and scaling up energy generation to power industrialisation and the digital economy,” reads the dispatch.

Food security

To boost food security, the government plans large-scale modern irrigation through the construction of 50 mega dams, 200 mini-dams, and more than 1,000 micro-dams, bringing an additional 2.5 million acres into agricultural production.

“These investments will reinforce food and water security, support agro-industrialisation and uplift rural livelihoods,” reads the dispatch.

Transport and logistics infrastructure will also be expanded through the dualling of 2,500 kilometres of highways and the tarmacking of 28,000 kilometres of roads, extension of the Standard Gauge Railway to Malaba, expansion of regional oil pipelines, and modernisation of airports as well as the ports of Mombasa and Lamu. The Cabinet said these projects are intended to strengthen connectivity across farms, industries, cities, and regional markets.

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• Cabinet approves Sh5 trillion strategy to expand roads
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Scale up energy generation

Energy generation will also be scaled up, with at least 10,000 megawatts of new capacity to be added over the next seven years to support manufacturing, value addition, digital expansion, e-mobility, and emerging technologies. According to the Cabinet, the expansion will draw on Kenya’s geothermal, hydro, solar, wind, and nuclear potential.

The Cabinet added that both funds will be professionally and independently managed under clear governance, transparency, and accountability frameworks.

The National Infrastructure Fund will be overseen by a competitively appointed board and chief executive officer, while the Sovereign Wealth Fund will operate under a robust policy framework to ensure prudent investment, fiscal discipline, and inter-generational equity.