The National Infrastructure Fund (NIF) will require projects it invests in to generate a minimum equity return of 7 per cent under a new investment policy now before Parliament.
The policy sets out how the Fund will invest and manage its resources as the government looks to attract more private money into major infrastructure projects across the country.
The National Infrastructure Fund Investment Policy has been submitted to the National Assembly’s Finance and National Planning Committee for consideration.
Under the proposed framework, projects receiving equity financing from the Fund will have to meet the 7 per cent minimum return threshold.
The target is slightly higher than the 6.5 per cent coupon offered on the seven-year Infrastructure Bond issued by the government in 2023. Like other infrastructure bonds, the 2023 bond was tax-free.
However, the two rates apply to different types of investments. The 6.5 per cent figure was a fixed return paid to bondholders, while the NIF’s 7 per cent target is the minimum return expected from equity investments in infrastructure projects.
The policy also proposes limits on how much money the Fund can put into a single project or sector in an effort to spread risk.
No single project would be allowed to account for more than 20 per cent of the Fund’s assets, while investments in one sector would be capped at 40 per cent.
Treasury has further proposed that projects seeking NIF investment should have the capacity to raise at least 60 per cent of their financing through non-recourse project debt.
The Fund itself would not be allowed to borrow against its balance sheet under the proposed framework.
The policy gives NIF a broad investment mandate covering major infrastructure projects such as national highways, railway networks, airports and seaports.
It would also be able to invest in electricity generation, transmission and distribution, as well as ICT infrastructure, water reservoirs, irrigation and agribusiness infrastructure.
The Fund could make these investments through equity, quasi-equity, debt instruments, project finance structures, special purpose vehicles and other investment arrangements.
The proposed policy is part of wider government efforts to find alternative ways of financing major infrastructure projects at a time when public resources remain under pressure.
Instead of relying entirely on government borrowing, the framework seeks to position the Fund as a vehicle for attracting private capital while ensuring that investments generate reasonable returns.
Members of the public have been invited to give their views on the proposed policy through memoranda to Parliament.
The deadline for submissions is August 24, 2026.