List Of BIG Projects Left Out Of Ruto’s National Infrastructure Fund
The government has moved to clarify the types of projects that the National Infrastructure Fund will not finance, as the public continues to seek clarity on how the fund will operate.
In a clarification, the government stated that the fund would not finance stadiums, public parks and other social infrastructures.
According to NIF guidelines on the operation of the fund, these projects cannot be financed since they are classified as pure public goods and cannot generate predictable revenue to repay investors.
Projects financed by the fund must have a reliable income stream capable of supporting investment repayments.
While stadiums and parks remained important for the public, they cannot be structured under the NIF model since one of the fund’s agendas is to generate profit to finance other projects.
As a result, these initiatives will instead be financed through government budgets, donor grants or other public funding mechanisms rather than investment-based structures.
Projects that the fund would finance include airports, toll highways, energy projects, and logistics infrastructures.
The state says that they are bankable since they would generate returns from charges of landing fees, cargo handling, and commercial operations, in cases of airports.
The clarification comes a day after President William Ruto assented to the NIF bill, making it a law to mobilise Ksh 5 trillion to enhance infrastructure.
President Ruto had already revealed that the expansion of the Jomo Kenyatta International Airport (JKIA) will be the first project to be financed by the fund.
NIF is structured to mobilise private capital and other non-traditional sources of funds, including domestic pension funds, collective investment schemes, sovereign wealth funds, and climate finance facilities, a shift from the usual reliance on debt.
The government has also clarified why it is allowing investors to participate in decision-making on what projects to fund.
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It noted that allowing the investors to participate in oversight and decision-making introduces professional financial discipline and accountability.
The fund’s key financing sources shall stem from investment capital, the national budget, and the privatisation and sale of state-owned enterprises.
Treasury Cabinet Secretary John Mbadi explained that the infrastructure fund would not deduct levies from public servants’ salaries, similar to other public schemes like the housing fund.
“No, we will not deduct civil servants’ salaries. This fund is being set up using seed capital from the divestiture of government shares in state-owned enterprises,” Mbadi stated in an interview.
List Of BIG Projects Left Out Of Ruto’s National Infrastructure Fund
