Treasury Proposes Sh220 Billion Infrastructure Allocation To Cut Nationwide Transport Costs

The government has proposed Sh220.4 billion for the development of roads as part of a wider infrastructure plan aimed at strengthening connectivity, lowering transport costs, and supporting economic activity across the country.

Speaking before Parliament, Treasury Cabinet Secretary John Mbadi said infrastructure remains central to economic growth by linking regions, supporting energy and water systems, and enabling production and trade through lower costs and expanded markets.

According to the proposal, Sh44.3 billion will support the construction of roads and bridges, Sh58.0 billion is designated for the rehabilitation of roads, and Sh118.1 billion will go toward road maintenance.

The capital-intensive developments are heavily prioritised in the Financial Year (FY) 2026/27 budget. President William Ruto has placed significant emphasis on infrastructure delivery, as the administration prepares to defend its development record.

The state estimates that total national expenditure will reach Sh4.82 trillion for the fiscal year. Out of this amount, Sh750 billion is earmarked for development projects, including transport, water, and energy networks.

To finance large-scale projects without increasing public debt, the government is leaning on Public-Private Partnerships (PPP). The National Infrastructure Fund (NIF), established under the National Infrastructure Fund Act 2026, will pool private capital from pension funds, commercial banks, and sovereign wealth funds.

Initial seed capital for the fund includes Sh106.3 billion raised from the Initial Public Offering (IPO) of the Kenya Pipeline Company (KPC). The state also anticipates an additional Sh204 billion from the partial divestiture of its stake in Safaricom PLC to Vodacom.

Key priorities on the immediate transport slate include the dualling of the 175-kilometer Nairobi–Nakuru–Mau Summit Road, and the Nairobi–Maai Mahiu–Naivasha project.

The state reported that more than 2,669 kilometres of roads have been constructed, and over 132,000 kilometres maintained across the country since 2022.

Beyond highways, the budget proposes Sh400 million for the Kenya Ferry Ramp in Likoni, Mombasa. Another Sh1.0 billion is allocated for developing public ferry landing ramps on Lake Victoria, specifically at Mbita and Sena in Homa Bay County.

In the energy sector, the Treasury has proposed Sh30.9 billion to expand electricity access and strengthen power supply systems. Installed electricity generation capacity stood at 3,272 MW as of April 2026.

The energy segment allocations include Sh7.5 billion for the National Grid System, Sh20.2 billion for rural electrification, and Sh3.2 billion for alternative energy technologies.

For water and sewerage infrastructure, the government has allocated Sh51.5 billion, with an additional Sh6.3 billion going toward water resources management and Sh2.5 billion for flood control.

Large-scale commercial irrigation schemes have been allocated Sh1.8 billion, while community-managed irrigation projects will receive Sh3.3 billion to enhance food sustainability.