Inside James Mworia’s plan to take Sh400 billion in infrastructure spending off Kenya’s budget

James Mworia has taken charge of Kenya’s new National Infrastructure Fund with an ambitious proposition: commercially viable infrastructure could eventually account for about Sh400 billion in annual spending that no longer has to come directly from the Exchequer.

The founding CEO’s model relies on a relatively simple principle. NIF should preserve its seed capital, generate income from it, use that income as equity in infrastructure projects and bring pension funds, banks and other investors alongside it. Project-level debt would then multiply the equity available for investment.

Mworia believes the country already has a substantial pool of domestic capital to make this possible. Pension funds hold more than Sh3 trillion in assets, while Kenya’s banking sector has about Sh8.4 trillion in assets, creating a potential domestic funding base for infrastructure that is currently financed heavily through government borrowing and foreign capital.

The harder question is whether that capital can be packaged into investments that institutional investors can actually hold.

Turning NIF’s seed capital into infrastructure equity

Mworia’s starting point is the seed capital already held by NIF, which the reporting around the fund places at about Sh310 billion.

His proposal is to preserve that principal rather than repeatedly spending down the capital raised through partial divestitures. Under the National Infrastructure Fund Act, NIF can invest in government securities, and Mworia estimates that the fund could earn roughly 12.5 percent annually, translating to about Sh42 billion in income. He uses Sh40 billion as a working figure.

That distinction is central to his model.

Rather than using the seed capital itself to finance each project, NIF could use the recurring income as an equity contribution while keeping the underlying capital intact for the long term.

The fund would then invest through special-purpose vehicles created for individual infrastructure projects. Mworia’s example is an airport project, although the same structure could apply to other commercially viable infrastructure.

This is where private capital comes in.

In one illustration, Mworia assumes NIF contributes Sh40 billion of annual income while capital-markets investors mobilise another Sh100 billion. That would create a Sh140 billion equity pool for co-investment.

If the projects then carried roughly 70 percent debt, Mworia says that equity could support another Sh300 billion to Sh400 billion of borrowing, creating an aggregate project pipeline worth about Sh460 billion in his example.

That is the mechanism behind the larger Sh400 billion ambition. NIF would not need to have Sh400 billion in cash. Its role would be to provide anchor equity that attracts additional private and institutional capital and project-level debt.

Why pension funds are central to the plan

The biggest institutional pool in Mworia’s sights is Kenya’s pension industry.

Pension funds have long-term liabilities and are therefore natural investors in long-duration infrastructure assets. The problem is liquidity. An investment in a highway, airport or power project can tie up capital for years, while fund managers still have to manage their obligations to members.

Mworia’s proposed solution is a NIF Infrastructure Development Fund that could be listed on the Nairobi Securities Exchange.

Instead of asking a pension fund to invest directly into an individual infrastructure project, the listed vehicle would give investors exposure to a portfolio through a security that could be bought and sold. Mworia argues that this would address the asset-liability mismatch that makes direct infrastructure investments difficult for some institutional investors.

He also sees a political advantage.

Infrastructure such as major highways, airports, ports and power stations can carry national significance, making direct private ownership politically sensitive. A listed investment vehicle, in his view, would provide a transparent structure through which different investors could participate rather than having individual investors acquire stakes in strategic assets.

The proposed vehicle would therefore serve two purposes: providing liquidity to institutional investors and creating a broader ownership structure for infrastructure assets.

NIF wants banks involved before pension money arrives

Mworia’s model also draws a line between infrastructure development and infrastructure investment.

Pension funds, he argues, should not be expected to finance projects while they are still being developed. Before institutional capital comes in, projects need to have their technical, financial and governance questions resolved and be close to financial close.

NIF is therefore in discussions with development finance institutions about establishing a Project Preparatory Fund, which Mworia says could be around $100 million, or approximately Sh12.94 billion.

The facility would prepare projects so that by the time they reach the market, they have clearer revenue projections, debt structures, technical assessments and necessary approvals.

That addresses one of the less visible constraints on infrastructure investment: having money available does not automatically produce a pipeline of bankable projects.

A commercial viability filter

There is also a potentially important safeguard in NIF’s investment framework.

Mworia says the Investment Policy Statement defines a commercially viable project partly by its ability to support at least 60 percent non-recourse debt. Under a non-recourse structure, lenders are repaid from the project’s own cash flows rather than relying on a guarantee from NIF or another party.

The principle is straightforward. If a proposed infrastructure project cannot support substantial project-level debt, it may not be commercially viable enough for NIF and should instead be considered for funding through the national budget.

That distinction could become important as the fund begins receiving projects from government agencies and the Treasury.

NIF is ultimately being asked to solve a public financing problem, but its mandate is focused on infrastructure that can generate sufficient commercial returns to attract investors.

Keeping more infrastructure financing in shillings

Mworia’s argument extends beyond where the money comes from.

He wants more infrastructure financing to be denominated in Kenya shillings, arguing that domestic banks and institutional investors can provide construction financing in local currency before projects are refinanced through shilling-denominated infrastructure bonds.

His concern is particularly visible in the power sector, where foreign-currency financing has contributed to dollar-linked obligations for some infrastructure projects. Mworia argues that greater use of local-currency financing could reduce the exposure of project costs and tariffs to exchange-rate movements.

The proposal would also have a broader domestic economic effect. If projects are financed and contracted in shillings, Mworia argues, there is greater scope for contractors to source materials and services locally, keeping more of the spending within the Kenyan economy.

The final piece is recycling the assets

The model does not end when a project becomes operational.

Mworia envisages infrastructure companies eventually being brought to the Nairobi Securities Exchange, allowing ownership to broaden and capital to be recycled into another generation of projects. He points to NIF’s initial stakes arising from partial divestitures and suggests that mature infrastructure businesses could eventually return to the capital markets.

That creates the circular model NIF is trying to establish:

seed capital → investment income → infrastructure equity → private capital and debt → operating assets → capital-markets exit → recycled capital.

The appeal is obvious. If it works, the government would not have to repeatedly find fresh budgetary resources for every commercially viable infrastructure project.

But the model also places a significant burden on NIF’s ability to select projects, structure transactions and manage risk.

The capital may be easier to find than the projects

Mworia is confident that Kenya’s domestic capital markets can provide the money. He points to the size of the pension sector and the regulatory headroom available to institutional investors.

The bigger constraint may be finding enough projects that satisfy commercial investors.

That is particularly important because the Sh400 billion annual target is an ambition, rather than an amount NIF has already mobilised. Likewise, the Sh140 billion equity and roughly Sh460 billion project-value figures are illustrative scenarios from Mworia’s model, not demonstrated financing volumes.

NIF therefore has to build two things at once: an investment institution capable of protecting public capital and a pipeline of infrastructure assets capable of attracting private money.

Mworia’s own proposal offers an early measure of whether the model can move beyond policy. Speaking at Africa Capital Week, he called for a Sh50 billion co-investment fund to be established within three months, arguing that the discussion around infrastructure finance should produce a tangible investment vehicle.

That will be one of the first concrete indicators of whether NIF can turn its financing architecture into transactions.

For now, Mworia’s proposition is clear: Kenya’s infrastructure financing problem could be approached by using public capital as a permanent anchor, rather than treating every infrastructure project as a call on the annual budget. The success of that model will depend on whether the fund can preserve its capital, attract domestic investors, maintain commercial discipline and build enough bankable projects to absorb the money it hopes to mobilise.

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