Safaricom Strikes Historic Pact with Kenyan Banks to Fuel Sustainability Agenda

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Safaricom Signs sustainability linked loan deal with KCB, ABSA, Standard chartered

Safaricom has announced the closure of a multi-billion Sustainability Linked Loan (SLL). This deal is part of its Environmental, Social, and Governance (ESG) agenda.

“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

Mr. Ndegwa further emphasizes the deal’s importance, stating it is another sign the telco is committed to its Sustainability agenda. Indeed, it strengthens Safaricom’s commitment to improving the lives of Kenyans.

Moreover, Safaricom sees this initiative as a chance to diversify its investment portfolio. In particular, the company will focus on reducing its emissions to reach Net Zero targets and tracking gender diversity. Safaricom will also focus on monitoring its social equality impacts.

The KES 15 billion Sustainability Linked Loan is the first facility of its kind. It is the first Kenya Shilling-denominated SLL in the market. In fact, it is the biggest Environmental, Social, and Governance (ESG) loan facility in the East African region to date.

Notably, the loan can be increased to KES 20 billion by accordion.

Sustainability Loan Facilitated by Four Banks

Four banks have come together to put up this loan facility. The banks are Standard Chartered, Standard Bank, ABSA, and KCB. In the deal, Standard Chartered Kenya acted as the Global Coordinator, Sustainability Coordinator, and Mandated Lead Arranger for the deal. Kenya Commercial Bank acted as Mandated Lead Arranger. Lastly, Standard Bank and ABSA Bank acted as Arrangers.

Access to the loan facility is subject to specific goals being achieved by Safaricom. This means Safaricom will progressively receive funding from the banks upon achieving milestones in the ESG field.

It is important to note that the ESG Loan announcement comes on the backdrop of the ongoing African Climate Summit. The event is currently ongoing and is hosted by Kenya.

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,” Said Kariuki Ngari, Chief Executive Officer, of Standard Chartered Bank Kenya on behalf of the consortium of banks.

This deal is a pioneer in sustainability financing. As more companies in the region set out ESG objectives, we are bound to see more sustainability linked loans.