World Bank urges pension schemes to invest in infrastructure

The World Bank has urged local pension schemes to invest in public-private partnership (PPP) projects as the Government moves to open infrastructure as a new asset class for them to invest in.

World Bank Senior Financial Sector Specialist Caroline Cerruti says infrastructure needs in Kenya are vast with need for about $4 billion (Sh400 billion) per year, creating an opportunity for long term institutional investors, particularly pension schemes.  

According to Retirement Benefits Authority data, the pensions sector had assets worth over Sh1.02 trillion at the end of 2017 and schemes are under pressure to maximise value for their members through diversifying their investment.

Ms Cerutti was addressing trustees of various pension schemes across the country during the annual Trustees Forum organised by Pensions administrator Enwealth Financial Services in Mombasa.

“Bank lending as a source of long-term financing is diminishing. Given constraints of commercial banks to lend long-term to PPP projects, it makes sense for the Government to search for long-term local currency financing for various infrastructure projects. This is an opportunity for pension schemes,” she said.

The National Treasury is expected to table a proposal in the next financial year’s budget to revise the asset classes that pension schemes are allowed to invest in.