Consortium offers pension schemes pool for big projects

A consortium that enables pension schemes to jointly make sustainable long-term infrastructure and alternative asset investments in the region has been launched.

The Kenya Pension Fund Investment Consortium (Kepfic) provides an opportunity for collaboration between Kenyan and US pension funds as well as other institutional investors.

The consortium is supported by the US government through USAID's Kenya Investment Mechanism, Power Africa, the World Bank Group, and MiDA Advisers in partnership with USAid Invest.

It was launched yesterday by US Ambassador Kyle McCarter and representatives from the World Bank and American advisory firm MiDA Advisers.

“The US government is pleased to support a Kenyan institution that presents an innovative approach to infrastructure investment, as it follows recent changes to the Retirement Benefits Authority guidelines allowing pension funds to invest up to 10 per cent of their assets in infrastructure, potentially unlocking over Sh100 billion ($917 million),” said the US envoy.

“Launching Kepfic is a huge milestone, not just for pension schemes, but also for the country,” said Kepfic Board Chairperson Sundeep Raichura. “With national and county governments facing a growing budget deficit and competing needs, pension funds through Kepfic will be well positioned to help bridge the infrastructure funding gap.”

Kenya’s annual infrastructure funding gap stands at over Sh200 billion, presenting private investors with opportunities in sectors including power, transportation, and urban development.

Pension funds often lack capacity to venture into big-ticket infrastructure projects alone, a vacuum Kepfic will fill. The consortium intends to mobilise more than Sh25 billion over the next five years for infrastructure investment.

Kepfic’s membership includes Kenya Revenue Authority Staff Pension Scheme, Safaricom Staff Pension Scheme, KenGen Staff Retirement Benefits Scheme, and Kenya Pipeline Retirement Benefits Scheme.