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Safaricom PLC recently floated its KSh 40 billion Domestic Medium-Term Note (DMTN) programme to finance or refinance environmentally eligible projects under Safaricom’s Sustainable Finance Framework.
Aimed at strengthening the domestic corporate debt market, the programme enables Safaricom to issue multiple types of bonds, including green, social, and sustainability-linked instruments, in several tranches over time.
The first tranche, a KSh 15 billion “Green Bond” with a KSh 5 billion greenshoe option, offers a fixed, tax-exempt interest rate of 10.4% over five years. The bonds are accessible to retail and institutional investors, with a minimum subscription of KSh 50,000 and top-ups in increments of KSh 10,000.
“Through this MTN programme, we aim to diversify funding sources, reduce reliance on short-term or foreign-currency debt, and support long-term growth, including infrastructure expansion and sustainable operations,” Safaricom said in a statement.
Strengthening Kenya’s Debt Market
The DMTN programme is among the largest corporate bond initiatives in Kenya, signaling the country’s growing fixed-income market. The combination of retail-friendly entry points, tax-free returns, and ESG-focused projects is expected to attract a broad base of investors, providing an alternative to bank financing and foreign debt.
Locally, Safaricom’s move follows similar corporate bond initiatives by firms such as East African Breweries PLC, highlighting an ongoing trend of domestic companies tapping the capital markets to fund growth and infrastructure.
In the global context, Safaricom’s bonds align with emerging-market corporate and green bonds, which generally offer higher yields than developed-market counterparts to offset currency and macroeconomic risks. While developed-market green bonds typically carry lower single-digit yields, they benefit from lower risk and deeper liquidity. The Safaricom MTN, therefore, presents an attractive option for investors seeking competitive returns in an ESG-linked framework.
The launch reflects a maturing Kenyan corporate bond market and increasing investor appetite for sustainable finance. For Safaricom, the MTN programme provides long-term funding for growth while supporting environmentally sustainable initiatives. For investors, it offers an opportunity to earn tax-free returns while participating in projects that align with environmental and social goals.