New facility signals the evolution of Kenyan financial services in line with shift to support Environmental, Social and Governance Agenda
4th September 2023 Nairobi, Kenya. … Safaricom (NSE: SCOM) has announced the closure of a multi-billion Sustainability Linked Loan (SLL) to strengthen its Environmental, Social and Governance (ESG) agenda.
The KES 15 billion deal, which is upscalable to KES 20 billion by accordion, is the largest ESG linked loan facility ever undertaken in East Africa, and the first of its kind for Safaricom as well as the first Kenya Shilling denominated SLL in the market.
“In line with our focus to advance our sustainable business agenda, this funding will unlock our ability to create more diversified investments that will support transformative investments in new technologies, systems and services that allow us to comprehensively manage our ESG footprint,” said Peter Ndegwa, Chief Executive Officer, Safaricom PLC.
The investment is also expected to contribute to the growth of Kenya’s sustainable financing market, which remains a key priority for the Government of Kenya as part of its Vision 2030 plans.
“This deal is a significant milestone for Safaricom as it aligns our financial strategy with our Sustainability agenda, a reflection of our commitment to transforming lives by partnering for growth,” Mr Ndegwa said.
The funding provided by a consortium of four banks consisting of Standard Chartered, Standard Bank, ABSA, and KCB will enable Safaricom to access funding based on its progressive achievement of set milestones across key ESG areas.
“This significant milestone indicates the continued momentum towards building a more robust sustainable, and diversified financial ecosystem in the region,” said Kariuki Ngari, Chief Executive Officer, Standard Chartered Bank Kenya on behalf of the consortium.
“Across the market, we are seeing accelerated interest in sustainable finance products alongside more considered strategies for climate initiatives. We are enthusiastic about this partnership with Safaricom as it positions Kenya as a regional leader in inclusive and responsible investment,” he said.
The SLL will help Safaricom deepen its focus on strategic sustainable investments as it continues to pursue more initiatives aligned to its sustainable business strategy as part of its ongoing transition to becoming a fully-fledged technology company by 2025. In particular, the company will focus on reducing its emissions to reach Net Zero targets, tracking gender diversity, and monitoring social equality impacts.
The deal also paves the way for further sustainability financing in the region as companies seek to become more accountable for their ESG reporting and financing.
Standard Chartered Kenya acted as the Global Coordinator, Sustainability Coordinator and Mandated Lead Arranger for the deal while Kenya Commercial Bank acted as Mandated Lead Arranger. Standard Bank and ABSA Bank acted as Arrangers.