National Assembly approves sessional paper on Infrastructure Fund Investment policy

The National Assembly committee on Finance Chairperson,Kuria Kimani.[File, Standard]

The National Assembly has approved the Sessional Paper No. 7 of 2026 on the National Infrastructure Fund Investment (NIF) Policy, which seeks to establish investment guardrails of critical projects.

The NIF policy is expected to give guidelines on the operationalisation of NIF, culminating in project identification, implementation and subsequent review to address any challenges that may arise, or deal with any shortcomings that may have been overlooked.

The National Assembly committee on Finance Chairperson, Kuria Kimani said they examined the policy against the provisions of the National Infrastructure Fund Act 2026, and identified a number of areas that require strengthening to ensure the Fund operates within a clear, transparent and accountable investment framework.

He said the committee noted that the Sessional Paper does not provide a sufficiently comprehensive investment policy framework to guide the Fund in making investment decisions in a consistent, transparent and prudent manner.

In particular, Kuria explained, the policy does not adequately set out the investment guardrails relating to eligible and priority infrastructure sectors, project selection and ranking, commercial viability, financial returns, capital mobilisation, portfolio allocation, exposure limits, leverage, risk management, liquidity, governance, monitoring and reporting.

“The absence of these overarching parameters may result in inconsistent investment decisions and expose the Fund to unnecessary financial, operational and governance risks,” he explained.

“The Committee recommends that the Sessional Paper be amended to provide for a comprehensive investment policy framework, establishing the principal investment guardrails applicable to the Fund, and enabling the board to operationalise detailed investment policies in accordance with the Fund's mandate and national infrastructure priorities,” he said.

Similarly, he said the Sessional Paper does not adequately provide for validation of the ability and willingness of intended users or consumers to pay for the services to be provided by proposed investment infrastructure projects.

He explained that a project may have sound technical designs and strong project demand but may fail to generate sustainable revenues if the intended users cannot afford the applicable charges or are unwilling to pay for them.

“The assessment is important in determining appropriate tariffs, user charges, revenue projections and ultimately the commercial viability of the projects. The Committee recommends that the Sessional Paper be amended to require demand validation to include an assessment of the ability to pay, the willingness to pay of the target consumers or the users of the projects,” Kimani told the House.

The Committee also noted that the Sessional Paper places considerable emphasis on financial, commercial and regulatory considerations, but does not adequately provide for a structured assessment of the technical readiness of proposed infrastructure projects

He noted that a project may be financially viable but still face significant implementation challenges if its design, technology, site readiness, procurement arrangements or other technical requirements are not sufficiently developed.

The Committee also noted that certain infrastructure projects may require Government support measures before they can commence implementation.

The Committee has since recommended that the Sessional Paper be amended to provide that technical readiness should be assessed against a technical readiness framework developed by the Board and also establish whether the project requires Government support measures.

“Infrastructure investments are exposed to multiple and interconnected risks that may affect project costs, completion, revenues, operations, debt repayment and ultimately the Fund’s expected returns. The Committee further notes that Section 25(4) of the National Infrastructure Fund (NIF) Act of 2026 contemplates a risk management framework for the Fund,” he explained.

Leader of Majority Party in the National Assembly, Kimani Ichung’wah explained that he agrees with one of the recommendations that sought to remove a minimum of 7.5 per cent return and replace it with a positive return.

“This is because you may restrict yourself in a policy like this to a number, and you may never achieve that number. You may never get investments that have that kind of return. As long as you say a positive return, and you restrict what kind of projects you can fund using this Fund, it is good enough. As we say, the Fund will finance commercial ventures that are commercially viable,” Ichung’wah explained.

Nominated MP, Irene Mayaka supported the investment policy, saying it provides for commercial discipline in terms of ensuring that once funds are allocated for a specific type of project, they will go to that particular project.

She said key sectors have been earmarked for financing through this Fund, for instance transport, energy, and water infrastructure.

Also critical, she said, are the risk management guidelines included in this Policy Paper.

“This particular Policy Paper talks about a cap for projects. It says that a maximum of 20 per cent of assets can be allocated to a single project. It further says that for every sector, there is a limit of exposure and that any single sector cannot exceed 40 per cent of its total assets. This is also a key and a very important issue,” she said.

Dagoretti North MP, Beatrice Elachi noted that the Policy will help in shifting from the challenges of debt that the country has always faced.

“It will enable us to look at an investment strategy that will help us move forward. We must appreciate the fact that this Policy will protect Kenyans’ interests and enable them to follow through and question. We now have priority investments,” she told the House.