Kenya: Nif Policy Proposes 7PC Minimum Equity Return, Caps Project Exposure

What the report says

Kenya’s proposed Investment Policy for the National Infrastructure Fund (NIF) would set a minimum expected equity return of 7 percent and impose limits on how much of the fund can be placed in any one sector or project, according to Capital FM as distributed by AllAfrica. The draft is before the National Assembly’s Finance and Planning Committee and is designed to shape how the new vehicle handles major infrastructure investments.

Under the proposal, no more than 40 percent of the fund’s assets could go to a single sector, while exposure to one project would be capped at 20 percent. The policy would also require projects financed by the fund to have at least 60 percent debt capacity through non-recourse project debt, and it would bar the NIF from borrowing against its own balance sheet. These guardrails appear aimed at limiting risk as the fund backs large, capital-intensive developments.

The NIF was established in March as a government investment vehicle intended to pool public and private capital for infrastructure, reducing dependence on external borrowing and taxpayer funding. The draft policy says eligible investments could include highways, railways, airports, seaports, power infrastructure, ICT systems, water reservoirs, irrigation and agribusiness projects.

The framework also emphasizes commercial viability, independent technical and financial review, and political independence in investment decisions. Public comments on the draft are open until August 24, providing a short window for stakeholder input before the policy moves forward.