Safaricom will refund KSh21.4 billion (US$142.7 million) to investors after its debut green bond was heavily oversubscribed, drawing bids nearly three times the targeted amount, the telecoms operator said.
The company, which aimed to raise KSh15 billion (US$100 million) in the first tranche of its Medium-Term Note (MTN) programme, received applications worth KSh41.6 billion (UU$277.3 million), an oversubscription of 175.7 percent.
The surge in demand prompted Safaricom to activate its full KSh5 billion (US$33.3 million) greenshoe option, increasing the final allocation to KSh20 billion (US$133.3 million) the maximum permitted for the tranche. Even so, more than half of the bids will be refunded.
“The market’s response signals confidence not only in our balance sheet but also in the vision and strategy we are executing,” CEO Peter Ndegwa said. “We made a deliberate decision to diversify our funding sources, and this outcome affirms this choice.”
The refund totalling KSh21.4 billion (US$142.7 million) is one of the largest reimbursements ever recorded in Kenya’s corporate bond market.
The five-year fixed-rate note, priced at 10.4 percent, will pay interest semi-annually in June and December, with returns exempt from withholding tax. The green notes will be listed on the Nairobi Securities Exchange on 16 December.
Safaricom Focus on Sustainability Projects
Safaricom said proceeds from the bond will fund projects aimed at cutting its environmental footprint and improving energy efficiency across its network infrastructure.
Investments will include expanding solar power across base stations, upgrading high-energy transmission systems, and deploying new power-management technologies to reduce electricity consumption.
The operator has already accelerated a shift away from diesel generators, replacing them with hybrid and solar-powered systems, especially in remote regions. Its sustainability strategy also includes device recycling initiatives and biodegradable SIM packaging.
Ndegwa said the greenshoe mechanism broadened participation among investors. “It allows more investors to participate in Safaricom’s growth, rather than locking them out,” he said.
Growing Popularity of MTN Programmes
Safaricom’s green bond comes at a time when Medium-Term Note programmes are gaining traction among Kenyan corporates seeking flexible long-term capital.
MTNs allow firms to raise funds through multiple tranches instead of one large issuance, helping them match capital-raising with market conditions.
Several major companies have issued MTNs in recent years. East African Breweries Ltd (EABL) recently recorded a 52 percent oversubscription on its KSh16.76 billion (US$111.7 million) issue, while Centum Investments has repeatedly used MTNs to support real estate and investment projects.
In 2019, Acorn Group broke ground by issuing Kenya’s first certified green bond under an MTN programme to finance sustainable student housing a milestone for East Africa’s green finance market.
Analysts say the strong demand for Safaricom’s note reflects its solid credit profile and growing investor appetite for environmentally linked securities.
Kenya’s Push for Green Finance
The oversubscription comes as Kenya seeks to position itself as a regional hub for green finance. Regulators have been encouraging issuers to adopt sustainable financing structures, while pension funds and asset managers increasingly incorporate environmental, social, and governance (ESG) considerations into investment decisions.
Safaricom’s successful issuance strengthens its long-term funding strategy while reinforcing efforts to embed sustainability in its operations.
“With this issuance, Safaricom deepens the corporate bond market and signals a strong shift toward sustainable financing,” said a Nairobi-based fixed-income analyst.
The company said it will continue investing in energy efficiency, network modernisation, and climate-conscious operations as it expands its services in Kenya and the region
