Kenyan banks and Safaricom sign Sh15 billion loan for a greener tomorrow
Telco giant Safaricom has successfully closed a historic Kes15 billion Sustainability Linked Loan (SLL) deal to bolster its Environmental, Social, and Governance (ESG) agenda. The financing plan involves consortium of four leading banks, including StanChart, Stanbic, ABSA, and KCB.
This financing plan, which is expandable to Kes20 billion through an accordion mechanism, marks the largest ESG-linked loan facility ever undertaken in East Africa.
It’s also a remarkable milestone as Safaricom’s first-ever SLL and the first Kenya Shilling-denominated SLL in the market.
Safaricom’s commitment to sustainable business practices and its dedication to transforming the ESG landscape in Kenya have paved the way for this landmark financial initiative.
The funds from this loan will empower Safaricom to make diversified investments aimed at supporting transformative technologies, systems, and services to comprehensively manage its ESG footprint.
Peter Ndegwa, CEO Safaricom PLC, stated, “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.”
This initiative is not only about Safaricom but also contributes to the growth of Kenya’s sustainable financing market, aligning with the Government of Kenya’s Vision 2030 plans.
Peter Ndegwa emphasized the significance of the deal, saying, “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.”
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Milestones across ESG areas
The consortium of four leading banks, including Standard Chartered Bank, Stanbic Bank, ABSA Bank, and KCB Bank, is providing the funding. Safaricom will access this capital based on its progressive achievement of set milestones across key ESG areas.
Kariuki Ngari, CEO of StanChart, speaking on behalf of the consortium, noted, “This significant milestone indicates the continued momentum towards building a more robust, sustainable, and diversified financial ecosystem in the region. We are enthusiastic about this partnership with Safaricom as it positions Kenya as a regional leader in inclusive and responsible investment.”
Safaricom’s ESG-focused SLL will enable the company to deepen its commitment to strategic sustainable investments. These initiatives align with its sustainable business strategy and its ongoing transition into a fully-fledged technology company by 2025.
Key focus areas include reducing emissions to reach Net Zero targets, tracking gender diversity, and monitoring social equality impacts.
Moreover, this deal sets a precedent for sustainability financing in the region as companies increasingly seek to be accountable for their ESG reporting and financing. Standard Chartered Kenya played a pivotal role as the Global Coordinator, Sustainability Coordinator, and Mandated Lead Arranger for the deal.
KCB acted as Mandated Lead Arranger, while Stanbic Bank Kenya and ABSA Bank Kenya both served as Arrangers.
With this historic SLL, Safaricom solidifies its commitment to sustainability, paving the way for a greener, more responsible, and tech-driven future in Kenya and beyond.
