Treasury CS John Mbadi has defended the establishment of the National Infrastructure Fund, saying the entity will provide a financing mechanism for Kenya's transformation agenda in areas such as food security, expansion of modern transport and logistics infrastructure.
While urging the High Court to dismiss two cases challenging the Fund, Mr Mbadi further said the fund would also be used in scaling up energy generation to support industrialisation and the digital economy.
The CS said the Cabinet further resolved that the Fund would be managed under clear governance, transparency, and accountability frameworks, overseen by a competitively appointed board and chief executive officer to ensure prudent investment and fiscal discipline.
“I am aware that the intended corporate structure of the entity is designed to enhance efficiency, transparency, accountability, commercial discipline, and long-term financial sustainability in the financing, development, and delivery of public infrastructure projects of national importance,” the CS said in an affidavit filed in court.
The court suspended the operationalisation of the fund, pending the hearing of two cases filed challenging its establishment.
The cases were filed by the Consumers Federation of Kenya (Cofek) and another by Dr Magare Gikenyi, Eliud Matindi, Philemon Abuga and Dishon Keroti.
The petitioners argued that the establishment of a public fund through a limited liability company goes against Article 201 of the Constitution.
The petitioners further said the national infrastructure fund is a threat to the Equalisation Fund as it will divert or duplicate functions covered by the Equalisation Fund.
It is also the petitioners’ case that a national government public fund may only be established through an Act of Parliament or under the Public Finance Management Act.
“A national public fund cannot be established under any other statutory regime, including as a limited liability company under the Companies Act,” Dr Gikenyi said.
Dr Gikenyi also said the government has not stated how the said funds will be administered, contrary to the tenets of accountability and transparency as required by the Public Finance Management Act and the Public Finance Management (National Government) Regulations.
The petitioners said there are reasons to believe that the establishment of the fund is part of a wide scheme to enrich shadowy figures within the government cycle for political and economic gains, contrary to principles of good governance.
Parliament has also been faulted as petitioners argue that it has been rendered a bystander while the executive was purporting to create an ad hoc public fund.
Mr Mbadi said the cabinet considered a proposal from his ministry on December 16, 2025, for the setting up of an entity whose purpose is to mobilise resources to finance large-scale infrastructure.
The CS said the entity is intended to mobilise in excess of Sh5 trillion and would operate as a limited liability company.
Treasury CS John Mbadi before a joint sitting of the Departmental Committee on Finance and National Planning and the Select Committee on Public Debt and Privatization on January 13, 2026.
Photo credit: Bonface Bogita | Nation Media Group
Mr Mbadi said that since the process of establishing the entity intended to implement the proposed company is still ongoing within the Executive arm, as they were undertaking internal technical, legal, financial, and policy assessments to ensure utmost compliance with the law in its establishment.
“The incorporation of the entity does not in any way diminish its public character, constitutional accountability, or statutory oversight, but rather provides an appropriate and robust legal framework for the transparent, efficient, and responsible management of public resources in line with sound corporate governance principles,” he said.
Mr Mbadi also allayed fears that the establishment would duplicate or divert functions of the Equalisation Fund, saying the Equalisation Fund is expressly limited to the provision of basic services in marginalised areas, while the Public Infrastructure Fund is intended to mobilise and channel resources into large-scale infrastructure projects, including roads and energy, through innovative partnerships and market-driven strategies.
“Upon the conclusion of the foregoing the requisite approvals shall be sought from the relevant oversight and approval bodies, including Parliament, where such approval is constitutionally or statutorily required,” he said.
He asked the court to dismiss the case, arguing that the necessary processing is still underway.
