Nzomo Mutuku said this would help the funds earn higher returns while contributing to national good.
We want a vehicle that positively impacts the lives of pension fund members.
Two-thirds of pension schemes favour investments in equity while three-quarter schemes favoured sinking funds in infrastructure projects.
The government plans to use the Nairobi-Nakuru-Mau Summit four-lane carriageway to pilot infrastructure investment by pension schemes that control over Sh900 billion in member deposits.
Acting Retirement Benefits Authority chief executive Nzomo Mutuku said this would help the funds earn higher returns while contributing to national good, as a diversification from their traditional portfolio of the bourse and government securities.
“We want a vehicle that positively impacts the lives of pension fund members. The laws have been amended and we are waiting for formulation of legal structures that will enable development finance institutions to partner with local pension scheme in executing projects locally,” said Mr Mutuku.
Speaking during the Africa Pension Funds Network (APFN) in Nairobi, Mr Mutuku welcomed the new investment product saying there is a need for more innovative products where schemes could inject funds in public projects.
This, he said, will ease the government’s burden of seeking foreign funds to implement projects that improve lives.
NSSF Tanzania has already invested 60 per cent in the modern Kigamboni Bridge, Dar es Salaam, using a similar special purpose vehicle (SPV) and has lined up other capital projects.
The 187-kilometre Kenyan road expected to cost Sh14 billion has been awarded to China’s China Wu Yi Ltd and will have toll stations for the estimated 16,000 motorists, thereby enabling its funders to recoup investment and make profit for the next 30 years.
A business development executive with UK-based investment advisory firm, RisCura, Gerald Gondo supported involvement of pension schemes in partnering with the government on certain projects.
He said this will give them the first opportunity to acquire higher stakes in profitable ventures when governments opted to reduce ownership.
Panellist Jacqueline Irving said government projects ware the safest bet for pension schemes, which prefer to retain large amounts within their host countries.
Two-thirds of pension schemes favour investments in equity while three-quarter schemes favoured sinking funds in infrastructure projects.
European Investment Bank’s deputy head of Financial Sector Division Nokolas Milianitis said governments must be involved in formulating investment products for faster adoption.
In Kenya, pension schemes hold 28 per cent of all government securities worth nearly Sh542 billion or over half their asset. Other funds are held in real estate, bank deposits, fixed deposits, corporate bonds, offshore investments, private equity and real estate.
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