U.S. Ambassador to Kenya Mr Kyle McCarter, together with representatives from the World Bank and American advisory firm MiDA Advisors have launched the Kenya Pension Fund Investment Consortium (KEPFIC), which will enable pension schemes to jointly make sustainable long-term infrastructure and alternative asset investments in the region.
The consortium, supported by the U.S. Government through USAID’s Kenya Investment Mechanism, Power Africa, the World Bank Group, and MiDA Advisors (in partnership with USAID INVEST), provides an opportunity for beneficial collaboration between Kenyan and American pension funds and other institutional investors.
“The United States Government is pleased to support a Kenyan institution that presents an innovative approach to infrastructure investment in Kenya, as it follows recent changes to the Retirement Benefits Authority guidelines allowing pension funds in Kenya to invest up to 10% of their assets into infrastructure, potentially unlocking over Sh100b ($917m),” said Mr McCarter.
“Launching KEPFIC is a huge milestone, not just for pension schemes, but also for the country,” said Sundeep Raichura, KEPFIC board chairperson. “With national and County Governments facing a growing budget deficit and competing needs, pension funds through KEPFIC will be well positioned to help bridge the infrastructure funding gap.”
Kenya’s annual infrastructure funding gap currently stands at more than Sh200b ($1.8b) presenting private investors with numerous opportunities in sectors including power, transportation, and urban development.
Pension funds are the ideal funding partners for infrastructure projects due to their longer return on investment horizons and significant role in financing infrastructure projects in many countries, including the United States. However, individual pension funds in Kenya frequently lack the capacity to venture into big-ticket infrastructure projects alone. KEPFIC offers a solution to this challenge, by pooling resources from individual funds. The consortium intends to mobilize more than Sh25b ($229m) over the next five years for infrastructure investment.
KEPFIC’s membership includes highly regarded pension funds such as the Kenya Revenue Authority Staff Pension Scheme, Safaricom Staff Pension Scheme, KenGen Staff Retirement Benefits Scheme, and Kenya Pipeline Company Retirement Benefits Scheme, and the consortium’s investment pipeline includes opportunities across energy, transport and telecommunication sectors.