Editorial Desk 
The National Treasury Principal Secretary, Dr. Chris Kiptoo has constituted a committee of experts to explore and recommend strategic polices for mobilizing long-term capital from local financial markets to finance the country’s PPP projects.
The private sector-led committee will be chaired by the President of the Association of Pension Trustees and Administrators of Kenya, (APTAK), Dr. Hosea Kili.
The CEO of Liaison Group, Mr. Tom Mulwa will be the Committee’s Vice Chair. Members of the Committee comprise professionals with expertise in finance, investment, PPPs, infrastructure development and local capital markets.
The Public Private Partnerships (PPP) Directorate led by the Ag. Director-General, Ms. Neala Wanjala, will serve as the Committee’s Secretariat.
According to the PS, the Committee which has a 3-month mandate, is expected to accomplish the following terms of reference by the end of March this year:
- review of the regulatory framework to identify legal constraints to local financial market investment in PPP projects.
- review of appropriate PPP deal structures that suit investment preferences and risk appetites of local financial markets.
- review of the institutional capacity and readiness of local financial markets to invest in PPP projects.
- review of available guarantee instruments to safeguard local financial market investments, including identifying constraints to the issuance of such instruments for securing local financial market investments in PPP projects.
- identification and prioritization of PPP projects for expedited processing and investment by the local financial markets.
The Committee has already swung into action and constituted 4 sub-committees to support it in actualizing its mandate. The sub-committees include: the Legal, Regulatory and Compliance Committee; the Structuring and Investment Committee; the Research and Benchmarking Committee; and the Government Coordination and Budget Committee.
The PS said the Committee had been formed following discussions with the Cabinet Secretary, FCPA John Mbadi, to spearhead a strategy to channel funds from local financial markets into public infrastructure development.
At the same time, he noted that although the Government’s fiscal consolidation efforts were beginning to bear fruit, the government still faces resource constraints in implementing major infrastructure projects. Consequently, Public-Private Partnerships (PPPs) are viewed as a practical and sustainable approach to financing infrastructure development.
To enhance collaboration with the private sector, Dr. Kiptoo revealed that the government was working towards packaging commercially viable projects for investment by private participants. “Projects like the JKIA Airfield Expansion and the Nairobi-Nakuru-Mau Summit Highway are good candidates for private sector financing”, he said, adding that such projects will increasingly be made available for private sector participation.
Key industry participants present at the Committee’s inaugural meeting included representatives from Fund Managers Association, Kenya Association of Stockbrokers and Investment Banks, Nairobi Stock Exchange, Association of Retirement Benefits Schemes, NSSF, County Pension Fund, Liaison Group, Capital Markets Authority, Kenya Bankers Association, Association of Pension Trustees and Administrators of Kenya, Retirement Benefits Authority, Insurance Regulatory Authority, Association of Shariah Advisors in Islamic Finance, KeNHA and the PPP Directorate teams, among others.
Currently, Kenya’s pension industry has a cumulative asset portfolio estimated at KES. 2 trillion that can be strategically, albeit sustainably mobilized for infrastructure financing. Similarly, the insurance sector with its stable premium inflows and asset base of approximately KES 1 trillion, presents a consistent funding stream that can be structured towards viable long-term infrastructure initiatives.
At the same time, Kenya’s capital markets create opportunities for innovative financing solutions such as infrastructure bonds that can be tailored to attract both domestic and international investors.
