Kenya’s President William Ruto has revealed plans to establish a sovereign wealth fund and a separate infrastructure fund, part of an ambitious drive to channel public and privatised resources into strategic investments without exacerbating the country’s ballooning debt burden.
Speaking over the weekend, Mr Ruto said Kenya will form the sovereign wealth and infrastructure funds to support sectors such as energy, agriculture and infrastructure, while avoiding a repeat of what he called a “debt binge” that has strained national finances in recent years.
“We are in the process of having two important funds. One, infrastructure fund, and the other, which we are going to roll out, sovereign wealth fund,” Ruto said at an event over the weekend.
Kenya currently has among the highest ratios of debt service to revenue on the African continent, after a decade of heavy borrowing for infrastructure projects such as roads, railways and energy expansion.
The president said the sovereign wealth and infrastructure funds would be central to advancing sustainable development, directing resources toward long-term national priorities while helping to protect the economy from future shocks.
Government infrastructure funds are financial mechanisms designed to finance essential public services and critical facilities such as transport, energy, water and communications, often sourced from taxes, fees, national grants or public-private partnerships that draw in private capital.
Sovereign wealth funds, by contrast, are state-owned investment vehicles that manage revenues, typically from natural resources like oil and minerals.
More than 65 countries, including Norway, China, Nigeria, Canada and Botswana, have established such funds, according to the Sovereign Wealth Fund Institute, with the majority concentrated in developed economies.
The government believes the new fund structures will help decouple investment from debt accumulation and provide a more sustainable model of development financing. In support of the initiative, Kenya’s legislature has passed a law regarding the privatisation of state assets, a key enabler for capitalising the funds.
President Ruto confirmed that the first privatisation effort will focus on Kenya Pipeline Company, which handles the transport of petroleum products domestically and to neighbouring countries. The share sale is expected to raise up to 130 billion Kenyan shillings (about USD 1.01 billion) for the new vehicles.
The National Assembly approved Sessional Paper No. 2 of 2025, which sets the policy framework for the privatisation of the Kenya Pipeline Company (KPC) Limited. The move follows the adoption of a joint report by the Departmental Committee on Energy and the Select Committee on Public Debt and Privatisation.
The House adopted a key policy resolution supporting the privatisation, paving the way for the implementation of government plans to reduce state participation in commercial enterprises.
In February 2019, Kenya’s National Treasury published a draft Sovereign Wealth Fund Bill aimed at establishing a fund to manage proceeds from oil and other mineral exports. The proposed legislation seeks to create a framework for channeling resource revenues into long-term infrastructure development and ensuring more effective management of the country’s natural wealth.
The infrastructure fund will prioritise boosting Kenya’s agricultural output; the country’s largest employment sector, with an eye to expanding exports. In addition, the fund will aim to scale up electricity generation: Kenya currently has about 2,300 megawatts of installed capacity but needs an estimated 10,000 megawatts to support industrialization.
“For far too long we have been on an average trajectory and that is why we are not making progress. We must think about tomorrow.” he said.
Do you have any story or press releases you want to share? Send tips to editor@envestreetfinancial.com
Follow us on Twitter, Facebook, or LinkedIn to ensure you don’t miss out on any