The National Treasury targets Sh80 billion private investment in the new financial year starting July 2026, signalling a deepening shift toward private-sector financing of infrastructure through deals structured along the lines of Adani-type transactions.
The cash will be mobilised through conventional Public–Private Partnerships (PPPs) and Privately Initiated Proposals (PIPs).
The projection marks an increase from the Sh70 billion Kenya is eyeing in the current 2025/26 financial year ending in June.
The growing use of private capital, the Treasury says, is intended to ease short-term fiscal pressures and reduce dependence on public debt and new taxes to finance roads, airports, power plants, and transmission lines.
“Over the medium term, the Government will prioritise PPP investments across key sectors including Agriculture, Roads, Transport and Logistics, Urban Development and Housing, Energy, Water, ICT, Agribusiness and Manufacturing, and Health,” the Treasury said in the 2026 Budget Policy Statement (BPS). “There are currently 40 Public Private Partnership (PPP) projects, of which 10 are under implementation while 30 are in the pipeline at various stages of the PPP project cycle.”
Planned PPP projects for fiscal year 2026/27, which starts in July, are projected to mobilise Sh50billion, forming a key component of the broader Sh80 billion private investment target.
The pipeline of projects expected to anchor private capital mobilisation includes the University of Nairobi’s 4,000-bed Purpose-Built Student Accommodation (PBSA) project aimed at easing student housing shortages at an estimated cost of Sh9.2 billion. The project is designed to deliver four blocks for female students and six for male students, offering studio, single, and shared rooms under a 30-year design–build–finance–operate–transfer model across the Main, Chiromo, and Kenyatta Medical campuses.
The Treasury has also listed the Sabaki Water Carrier Project, which is designed to reduce persistent water shortages in the Coast region areas of Malindi, Watamu, Mtwapa, and Nyali by abstracting water from the Baricho aquifer along the Sabaki River at a total cost of Sh28 billion.
Another PPP-structured investment is the proposed expansion of teaching and student accommodation facilities at the Moi Teaching and Referral Hospital’s ultra-modern College of Health Sciences in Eldoret. The project to be put up on a 15-acre plot at an estimated cost of Sh4 billion is designed to accommodate 3,000 students.
Additional private sector cash is expected to come from projects already under implementation, such as the Rironi–Nakuru–Mau Summit Road Project, whose total cost on completion is estimated at Sh150 billion, and the Galana-Kulalu Food Security Project.
Others include the Orpower 22 Menengai Geothermal Power Plant, Africa 50 transmission lines, and the National Transport and Safety Authority’s new generation driving licence and traffic monitoring system, whose cost is projected at Sh45 billion on completion.
The mobilisation strategy comes in the wake of heightened scrutiny of privately structured deals after Kenya cancelled agreements involving India’s Adani Group in November 2024. The contracts had targeted upgrades at the Jomo Kenyatta International Airport and the construction of power transmission lines, but were terminated amid governance, transparency, and value-for-money concerns.
The report has cautioned that Kenya’s growing PPP portfolio exposes the government to fiscal risks, including contingent liabilities, long-term contractual commitments, and vulnerability to inflation and exchange rate movements.
To mitigate potential liabilities, the Treasury says it is strengthening the legal and institutional framework under the Public Private Partnership Act, enhancing oversight by the Public Private Partnerships Committee and PPP Directorate, and tightening project appraisal standards.
Treasury officials have also pledged improved transparency through the mandatory publication of Privately Initiated Proposals, structured public participation, and disclosure of intended and ongoing projects.
