Safaricom PLC has announced that its inaugural Ksh. 15 billion corporate bond has attracted applications totaling Ksh. 41.6 billion. The bond is part of the larger Ksh. 40 billion Domestic Medium-Term Note Program.
The total subscription represents a staggering oversubscription of 175.7% against the initial Ksh. 15 billion target, signaling profound investor confidence in the company’s financial health and sustainability agenda.
The high demand prompted Safaricom to exercise the full Ksh. 5 billion greenshoe (over-allotment) option, bringing the total allocation for the tranche to Ksh. 20 billion, the maximum approved for this initial issuance. Consequently, the company will be refunding Ksh. 21.6 billion to unsuccessful investors in accordance with the Information Memorandum.
The launch of the bond on November 25th was hailed as Kenya’s largest Green Bond issuance to date, and uniquely, the first to allow subscriptions via a mobile platform (USSD *483*810#). This was alongside traditional online and licensed stockbroker channels. The offer ran for 11 days, closing on December 5th.
Designed to attract a wide range of investors, the fixed-rate note required a minimum investment of Ksh. 50,000, with subsequent top-ups in multiples of Ksh. 10,000.
Chief Executive Officer, Peter Ndegwa, welcomed the market response. “We are pleased with the market’s response. It signals confidence not only in our balance sheet but also in the vision and strategy we are executing,” said Mr. Ndegwa. “We made a deliberate decision to diversify our funding sources, and this outcome affirms this choice.”
The proceeds from the Green Bond will be channeled directly to finance or refinance a dedicated portfolio of eligible green projects. While focused on reducing environmental impact, the funds serve a broader corporate purpose: to strengthen financial resilience and fuel strategic long-term investments aligned with Safaricom’s vision to become Africa’s leading purpose-led technology company by 2030.
Specific projects include:
- Environmental Efficiency: Investments in renewable energy, such as expanding solar power across more base transmission stations and systems improvement for power management to reduce overall energy consumption.
- Corporate Strategy: Long-term investments in expanding 4G/5G network infrastructure, accelerating fixed broadband connections for homes and enterprises, and scaling financial services (FinTech solutions beyond M-PESA, including wealth, credit, and insurance).
Safaricom Group Chief Finance Officer, Dilip Pal, previously noted, “This transaction marks a major milestone in our strategic financing plans… The new bond creates a flexible funding framework to support long-term investments in connectivity, fixed broadband, and financial services.”
The five-year, fixed-rate notes are priced at a return of 10.4%. Interest will be paid semi-annually in June and December. A key feature for investors is that the return is fully tax-exempt under Kenyan law.
The Safaricom Green Notes are scheduled to be officially listed and begin trading on the Nairobi Securities Exchange (NSE) on Tuesday, December 16.