Public-Private Partnerships (PPPs) are a transformative mechanism for financing critical infrastructure and public services, harnessing private sector expertise and capital to accelerate national development.
Since 2013, Kenya has successfully mobilized approximately Sh140.7 billion in private capital through PPPs. Yet, despite this achievement, the full potential of domestic capital remains largely untapped.
As of December 31, 2024, Kenya's retirement benefits assets under management (AUM) reached Sh2.25 trillion. However, domestic capital—particularly pension funds, insurance funds, SACCO savings, collective investment schemes, and Islamic finance assets—has played a minimal role in PPP financing.
Pension schemes, for instance, are predominantly invested in low-risk, short-term assets, with 52.5 per cent allocated to government securities and 19.4 per cent to guaranteed funds, while investments in PPP infrastructure remain negligible.
This significant underutilization of domestic capital represents a missed opportunity. Pension and insurance assets, inherently long-term in nature, are perfectly suited to finance large-scale infrastructure projects that require stable, patient capital.
Increasing their participation in PPPs would not only ensure a sustainable, self-reliant approach to infrastructure financing but also reduce overreliance on foreign capital.
However, despite their proven potential, PPPs in Kenya face persistent challenges, including regulatory, financial, and institutional barriers that restrict effective mobilization of domestic capital. Addressing these barriers is critical to unlocking the power of local financial markets in supporting Kenya's infrastructure agenda.
The National Treasury appointed the Committee of Experts (CoE) on Leveraging Local Financial Markets for PPP Financing on 3rd February 2025. The CoE mandate was to explore, design, and recommend strategic policies, legal reforms, and practical solutions to accelerate the mobilization of domestic capital for PPPs.
Following extensive research, stakeholder consultations, and global benchmarking, we finalized our report and submitted it to Dr. Chris Kiptoo EGH, Principal Secretary, National Treasury, on 16th May 2025.
The CoE’s overarching recommendation is the establishment of the PPP Implementation Trust Fund (PPP-ITF)—a centralized vehicle designed to pool domestic capital and deploy it in bankable infrastructure projects.
The PPP-ITF would aggregate funds from pension schemes, insurance companies, SACCOs, collective investment schemes, and Islamic finance assets, providing a secure, professionally managed platform for sustainable infrastructure investment.
This is not a theoretical model. Our Research and Benchmarking Report analysed over 50 successful global case studies, including the United Kingdom’s Pensions Infrastructure Platform (PiP).
The PiP has successfully mobilized pension fund capital for national infrastructure, offering a structured, cost-efficient investment vehicle with strong governance and transparent operations.
This model is akin to how Umbrella Pension Schemes operate in Kenya. By adapting these lessons, Kenya’s PPP-ITF can transform local financial markets into a powerful engine for growth.
Beyond the PPP-ITF, the CoE report contains a raft of other recommendations designed to transform Kenya’s PPP landscape—addressing policy, regulatory, and institutional reforms aimed at enhancing transparency, investor confidence, and project sustainability. These recommendations are now under review by the National Treasury.
Our analysis indicates that by adopting this model, Kenya can position PPPs to account for up to 30% of national development expenditure in the medium term. This will reduce reliance on foreign financing and empower local investors to take a central role in infrastructure development.
This is the vision of a New Kenya for Public-Private Partnerships (PPPs) – a nation where domestic capital is the engine powering sustainable infrastructure development. Our commitment to leveraging local resources ensures that Kenyans are not just passive beneficiaries but active investors in the nation’s growth.
The writer is the Chairman, Committee of Experts on Leveraging Local Financial Markets for Investment into Public Private Partnerships Implementation
