Kenya is to launch a national infrastructure fund and a sovereign wealth fund, approved by the Cabinet on 15 December. The funds will be capitalized using proceeds from sales of the parts of Government’s shareholdings in giant Kenyan companies such as Safaricom, Kenya Pipeline Company and East Africa Portland Cement Company (EAPCC).

According to a report on Reuters, they will finance projects such as roads and power plants, and ease pressure on public borrowing.

The Cabinet memo on the approval reports that the funds are part of a KES 5 trillion ($38.8bn) roadmap to transform the economy. “Through innovative mobilization of domestic resources, strategic monetization of mature public assets, democratization of ownership through capital markets and the deployment of national savings, the Government will unlock large-scale private sector capital to finance priority investments while reducing reliance on borrowing and taxation.

“Under the new framework, all privatization proceeds will be ring-fenced and invested strictly in public infrastructure projects that generate and preserve long-term value. Every shilling invested through the dund is expected to crowd in up to KES 10 additional shillings from long-term investors, including pension funds, sovereign partners, private equity funds and development finance institutions.. Both funds will be professionally and independently managed under clear governance, transparency and accountability frameworks.”

An article in Africa Report says the Government aims to raise KES 347.5 billion ($2.7bn) from the share sales. The Reuters report adds “President William Ruto had said in October the infrastructure fund would invest in key sectors without increasing public debt to levels that have strained public finances in recent years… Kenya has one of the highest debt-service-to-revenue ratios in Africa after ramping up borrowing to build infrastructure over the past decade.” It adds that Ruto said Kenya must boost installed electricity capacity from the current 2,300 MW megawatts to at least 10,000 MW in order to industrialize.

Selling 15% of Safaricom

Reuters earlier reported that Kenya’s Government is selling a 15% stake in telecom operator Safaricom to South Africa’s Vodacom in a deal worth about $1.6 billion. After the sale Government will own 20% but still have influence on the strategic direction.

Safaricom is the biggest company by market capitalization on the Nairobi Securities Exchange, and Vodacom will pay KES 34 per share, an increase of nearly 24% on the weighted average share price of the last six months. Vodacom currently owns 39.9% of Safaricom and the transaction will lift its holding to 55%. Reuters quotes Eric Musau, head of research at Standard Investment Bank: “Vodacom is paying a control premium”, meaning a higher price to take control of the high performing telecom and mobile money leader (Safaricom owns M-Pesa mobile money).

However, dividends from Safaricom has been a major contributor to Government revenue. Africa Report says that in March 2025 the National Treasury received KES 16.9bn ($183m) and opinion is divided in Kenya as to whether the sale represents good value as it reduces future inflows.

Kenya Pipeline Company targets March 2026 IPO

The Kenyan Government is also working towards selling a 65% share of the ownership in Kenya Pipeline Company in March 2026 through a giant initial public offering (IPO) and listing on the Nairobi Securities Exchange, with a target to raise KES 100bn ($776m). KPC runs petroleum transport infrastructure in Kenya and into neighbouring states.

According to a report by Faida Investment Bank from March, KPC announced a 32% increase in its profit before tax, reaching KES 10.0bn for the year ending 30 June 2024 (from KES 7.6bn the previous year). Revenue grew by 15% to KES 35.4bn (from KES 30.9bn) “driven by increased sales volumes and favorable exchange rates… KPC completed the acquisition of Kenya Petroleum Refineries Limited (KPRL), which will allow the company to leverage KPRL’s storage assets and strengthen Kenya’s position as a regional oil and gas hub.”

Mwango Capital reported: “The transaction implies a valuation of 22.4 times earnings and 4.4 times revenue, based on the firm’s 2024 results, when revenue grew 15% to KES 35.4bn, net profit rose 53% to KES 6.87bn, and throughput increased 6% to 9.1bn litres. If completed, the offering would be Kenya’s largest state IPO since Safaricom’s 2008 listing, which raised KES 51.75bn.

Faida Investment Bank will lead the IPO and investment bank Dyer & Blair and stockbroker Francis Drummond have also been picked, according to reports in Business Daily Africa ( paywalled).

More power privatization sales in Kenya

The Africa Report article by Herald Aloo says Kenya’s National Treasury is considering whether to sell shares in the Kenya Electricity Generating Company (KenGen), where it holds 70%, and the sole electricity distributor Kenya Power, in which it owns 50.1%, though it has not yet made a decision. Kenya Power will need to issue new shares or new debt in 2026 to pay off current debts.

It reports that National Social Security Fund sold 27% of the ownership in listed cement maker EAPCC for KES 1.6bn ($124m) to Kalahari Cement, a subsidiary of Tanzania’s Amsons Group. “Amsons will have a 68.7% controlling stake in EAPCC, alongside full ownership of Bamburi Cement, the country’s largest producer.” NSSF will invest some of the funds into the Nairobi-Mau Summit highway, in a public-private partnership (PPP) structure.

“The Government’s move to dilute stakes across parastatals follows President William Ruto’s signing of the Privatisation Act, 2025, effective since October, and the Government-Owned Enterprises Act, 2025. Together, the two laws clear the path for reforms and potential selloffs aimed at plugging revenue gaps, reviving the stock market and lifting efficiency.”

The Cabinet memo says: “It also operationalises Article 201 of the Constitution on inter-generational equity and advances the Kenya Kwanza Manifesto’s investment-led growth agenda.. To strengthen food security, the government will undertake large-scale modern irrigation through the construction of 50 mega dams, 200 mini-dams and over 1,000 micro-dams, bringing an additional 2.5m acres into production.

“Transport and logistics infrastructure will be expanded through the dualling of 2,500km of highways and the tarmacking of 28,000km of roads, extension of the Standard Gauge Railway to Malaba, expansion of regional oil pipelines, and modernization of airports and the ports of Mombasa and Lamu.. Powering this growth will be a decisive scale-up of energy generation, with at least 10,000 MW of new capacity added over the next seven years.”

Photo: credit Jan Medhi 33300 of DepositPhotos