Safaricom Plc has secured its first Sustainability Linked Loan (SLL) from a consortium of local banks to reinforce its commitment to Environmental, Social, and Governance (ESG) initiatives.
The deal is valued at KES 15 billion, with the potential to increase to KES 20 billion through an accordion mechanism. This marks the largest ESG linked loan facility in East Africa and Safaricom’s first venture into such financing, also being the first Kenya Shilling denominated SLL.
An SLL is a unique loan where the interest rate is tied to the borrower’s sustainability performance, specifically tailored to their ESG targets. Meeting these targets leads to reduced interest payments.
Safaricom’s CEO, Peter Ndegwa, stated, “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.”
The consortium providing the funding consists of four banks: Standard Chartered Bank, Stanbic Bank, ABSA Bank, and KCB Bank. This financing will enable Safaricom to access funds based on its progressive achievement of predetermined milestones across key ESG areas.
Kariuki Ngari, CEO of Standard Chartered Bank Kenya, commented, “We are enthusiastic about this partnership with Safaricom as it positions Kenya as a regional leader in inclusive and responsible investment, reflecting the growing interest in sustainable finance products and climate initiatives.”
Standard Chartered Kenya played a pivotal role as the Global Coordinator, Sustainability Coordinator, and Mandated Lead Arranger for the deal. Kenya Commercial Bank acted as Mandated Lead Arranger, while Stanbic Bank Kenya and ABSA Bank Kenya served as Arrangers.
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