OPINION: Kenya National Infrastructure Fund: Governance Structure and Corporate Model

The Question: What problem ensues when the Kenya Infrastructure Fund is established as a Corporate Entity? And Why Not?

There is a robust conversation ongoing in Kenya on the Infrastructure Fund Governance Structure. Why is it Corporate? Why is it privately incorporated? What is being hidden, etc?

Governments around the world have structured sovereign funds, including those focused on infrastructure or broader investments, as separate corporate or private entities rather than direct extensions of government agencies for several reasons: operational independence, enhanced governance, and the ability to pursue commercial objectives without excessive government bureaucracy or political interference.

By operating as private-like entities, these funds can attract professional talent, implement market-driven strategies, and mitigate risks associated with direct government control, such as short-term political pressures or bureaucratic inefficiencies.

This structure also facilitates investments in diverse assets, including foreign markets, while maintaining accountability to the owning government.

For funds with an infrastructure emphasis (often classified as development or strategic funds), this setup allows targeted funding for long-term projects in energy, transportation, and technology, aligning national goals with financial returns.

Examples:

1. Temasek Holdings (Singapore): Established as a private limited company wholly owned by the Singapore government, it invests in a wide range of sectors, including infrastructure, with a portfolio valued at hundreds of billions. Its corporate structure is a model Kenya’s National Infrastructure Fund (NIF) can learn from.

2. GIC Private Limited (Singapore): Structured as a private company, it manages Singapore's foreign reserves with significant allocations to infrastructure and real assets, emphasising long-term returns.

3. Mubadala Investment Company (UAE): Operates as a corporate entity owned by the Abu Dhabi government, with a strong focus on infrastructure, energy, and technology investments globally.

4. Public Investment Fund (PIF, Saudi Arabia): Functions as a corporate-like entity, investing heavily in domestic and international infrastructure as part of Vision 2030, including renewable energy and logistics projects.

5. National Investment and Infrastructure Fund (NIIF, India): Set up as a private company with government minority ownership, it targets infrastructure development through partnerships, attracting foreign capital for roads, energy, and digital projects.

Can This Structure Work For Kenya National Infrastructure Fund?

This corporate/private entity model has proven effective by enabling professional, market-oriented management that delivers strong financial returns while advancing national objectives of sovereigns globally.

It has allowed funds to commit to long-term infrastructure investments, which often yield stable, inflation-resistant returns and contribute to economic stability and growth.

For instance, Temasek has achieved annualised returns of around 6–7% over decades, supporting Singapore's economy through diversified global holdings, including infrastructure.

Similarly, PIF's structure has facilitated massive infrastructure investments, such as in green hydrogen and renewable energy, attracting billions in private co-investment and driving Saudi Arabia's diversification away from oil.

NIIF's independent governance has scaled India's infrastructure by bridging public projects with institutional capital, delivering both development impact and market returns.

Overall, this approach has helped funds grow assets to over $11 trillion globally, outperforming traditional asset classes in many cases while funding critical sectors like energy transition and logistics.

Conclusion:

Kenya National Infrastructure Fund, like many other global funds, can and should be established as a corporate entity.

What is critical is meritocracy in board and management appointments, zero tolerance for corruption, strong transparency mechanisms, and remaining true to the mandate and vision for which the National Infrastructure Fund is established.

The writer is an International Civil Servant and Chancellor of Co-operative University of Kenya