Infrastructure fund will be well managed: Mbadi

Treasury CS John Mbadi (second left) receives National Student Budget Forum FY 2026/27 from the National Students Budget Chairman Solomon Oketch at the Treasury Building, Nairobi, on December 18, 2025. [Elvis Ogina, Standard]

National Treasury Cabinet Secretary John Mbadi has strongly defended the Cabinet’s proposal to form a limited liability company to hold the National Infrastructure Fund, denying claims that public money would be directed to a private entity.

The CS said the holding company would be professionally managed in accordance with the Government-Owned Enterprises Act, which governs all parastatals.

His defence comes alongside a revelation that the government is targeting Sh600 billion as seed capital for the fund, to be sourced from both divestment and privatisation of government-owned enterprises.

Mbadi emphasised that the limited liability company would not operate above the law, noting that the difference lies in it being commercially run.

“I have heard people say we are creating a private entity. This is not a private entity. This is going to be a limited liability company. Not all limited liability companies are private companies,” the CS said.

He insisted it would remain government-owned but commercially and professionally managed, unlike any other parastatal formed previously. “I am hearing: how do we put public funds in a private company? There is nothing private. We are not taking public funds… the law cannot even allow you to take public funds to a private entity,” he stated.

Mbadi said the Sovereign Wealth Fund, which Cabinet approved on Monday alongside the National Infrastructure Fund, would be managed similarly. The government is creating a holding account at the Central Bank of Kenya for the fund.

“We are targeting about Sh600 billion. Already, we have identified over Sh300 billion from Kenya Pipeline Company (KPC) and divestment of Safaricom alone. That gives us a minimum of Sh320 billion, then we will have to look for additional sources.”

He added that plans for KPC to be listed by March next year remain on course, with the government expecting about Sh100 billion from the exercise. The offloading of 15 per cent government shareholding in Safaricom to Vodacom is expected to generate Sh244 billion.

Mbadi countered critics, saying the fund would feature robust governance structures and would invest in projects alongside the private sector.

“In that fund, we are saying if you have been in politics for the last five years, you will not be a board member. We want to depoliticise this board,” he said.

His defence follows questions over the operationalisation of the fund, particularly after the Cabinet’s Monday communication that it would be hosted in a limited liability company.

“What would be the basis of this company to raise funds? Can anybody just create a company and go to the stock market to raise funds?” asked Alfred Omenya, a policy and governance expert.

Omenya said the only legitimate basis for such a company to raise money is that the funds would be secure. Even in the case of sovereign funds, he noted, the security of the monies ultimately remains with Kenyans.

“We have this issue of wanting to take away Kenyans’ wealth and put it in private hands. It is a terrible thing. We need to think carefully about how that fund will operate,” he said.

In the Monday Cabinet dispatch, the government outlined how the National Infrastructure Fund and the Sovereign Wealth Fund would provide a roadmap to transform the country’s economy into a first-world economy at a projected cost of Sh5 trillion.

“Approved as a limited liability company, the National Infrastructure Fund will serve as the central engine for aligning the administration’s financial resources with national development priorities,” the dispatch states.

CS Mbadi said the fund would be staffed by professionals, including project designers, who would pitch viable ventures to investors. The fund would then commit a portion of the project’s cost, with investors providing the remainder.

“The resources (profit) that come out of it, part will go to the National Infrastructure Fund and another part to the private sector. The private sector does not become part of the fund. They are only in partnership, blending capital to complete the project. That is how it works in other jurisdictions,” he explained.