Kenya has begun deploying its new KSh340 billion ($2.62 billion) National Infrastructure Fund, marking a major shift in how the country plans to finance infrastructure and attract private investment.

The fund has started purchasing domestic government bonds, with officials saying the move could increase liquidity in the banking system and encourage banks to provide more financing to businesses and households.

The fund is expected to invest across commercially viable sectors including energy, transport and logistics, ICT, agriculture and water. Its chief executive, James Mworia, said the full KSh340 billion is expected to be deployed by June 2027.

The government hopes the strategy will help address Kenya’s infrastructure needs without putting additional pressure on public finances. The fund is also targeting much larger investment through co-investment and debt, with a long-term goal of mobilising KSh3.6 trillion over the next decade.

Another potential investment is a stake in a major refinery project being developed by Nigerian billionaire Aliko Dangote in Lamu County.

The fund could become an important new source of capital for Kenya’s infrastructure pipeline while creating opportunities for domestic and international investors.