The Retirement Benefits Authority (RBA)
is crafting guidelines for pension funds to invest in infrastructure
projects through public private partnerships (PPPs).
The process is expected to allow pension funds to participate in large projects and the government to tap the funds.
This
comes as the schemes prepare to fund the 187-kilometre
Nairobi-Nakuru-Mau Narok road expected to cost Sh14 billion, awarded to
China Wu Yi Ltd and expected to have toll stations for the estimated
16,000 motorists per year.
RBA on Tuesday said the move
comes in the wake of rapid growth in the pension industry’s total
assets, having expanded from Sh50 billion in 2001 to about Sh920 billion
by December 31, 2016.
“The RBA has already consulted
the Treasury’s PPP unit and the World Bank,” said RBA acting chief
executive Nzomo Mutuku in Nairobi. Mr Mutuku was speaking during a
pension industry stakeholder forum organised by the Association of
Pension Administrators of Kenya (APAK).
Pension funds are diversifying their investments beyond government paper and listed shares to maximise returns.
They
are now investing in private equity (PE). A fortnight ago, PE firm
Fanisi Capital announced that eight pension funds had invested in its
second round of capital raising for small and medium sized enterprises
(SME), which managed commitments worth Sh3 billion.
Pension
lobby chairman Hosea Kili said industry players should start a serious
conversation on how to leverage on available technologies to attract
more pension contributions and grow coverage from the current 15 per
cent by making pension saving attractive to the informal sector.
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