In 1999, the Kenyan government received an initial grant from the US government to expand Internet services under the Leland initiative This grant was later increased to provide Internet services to the initial 22 strategic institutions in partnership with Telkom Kenya LTD. Telkom provided the leased line infrastructure as well the international bandwidth at a 50% discount compared to the commercial ISPs. The grant was used to expand the Telkom Kenstream leased line infrastructure and to establish some last mile radio links to some of the institutions outside their network. The investment into Telkom was later used to subsidize bandwidth services to universities thus transferring the assets to Telkom Kenya under a bandwidth recovery plan fully by June 2006.

In 2007, KENET was appointed agent by the Ministry of Information and Communication to implement a bandwidth expansion and broadband private network using a Government of Kenya grant as part of the Kenya Transparency and Communications infrastructure project. This grant has been used to connect 54 institutions, including all universities to a broadband national network and distribute satellite and undersea bandwidth to the institutions.

During the period 2005-2008, KENET also received several grants from Rockefeller Foundation and Ford Foundation for E-readiness projects.