Safaricom has announced the closure of a multi-billion sustainability linked loan to strengthen its environmental, social and governance (ESG) agenda. The Kshs. 15 billion deal, which can be scaled up to Kshs. 20 billion by accordion, is the largest ESG linked loan facility ever undertaken in East Africa. It is also the first of its kind for Safaricom as well as the first Kenya Shilling denominated facility in the market. “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 .
Milestone
The investment is also expected to contribute to the growth of Kenya’s sustainable financing market, which remains a key priority for the Kenyan government as part of its Vision 2030 plans. “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,” Mr Ndegwa said.
The funding is provided by a consortium of four banks consisting of Standard Chartered Bank, Stanbic Bank, ABSA Bank and KCB Bank. It will enable Safaricom to access funding based on its progressive achievement of set milestones across key ESG areas. “This significant milestone indicates the continued momentum towards building a more robust, sustainable and diversified financial ecosystem in the region,” said Kariuki Ngari, Chief Executive Officer, Standard Chartered Bank Kenya on behalf of the consortium. “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,” he added.
The sustainability linked loan will help Safaricom deepen its focus on strategic sustainable investments as it continues to pursue more initiatives aligned to its sustainable business strategy as part of its ongoing transition to becoming a fully-fledged technology company by 2025. In particular, the company will focus on reducing its emissions to reach net zero targets, tracking gender diversity and monitoring social equality impacts.
The deal also paves the way for further sustainability financing in the region as companies seek to become more accountable for their ESG reporting and financing.
Standard Chartered Kenya acted as the Global Coordinator, Sustainability Coordinator and Mandated Lead Arranger for the deal. Other lenders involved in the deal were Kenya Commercial Bank who acted as Mandated Lead Arranger, as well as Stanbic Bank Kenya and ABSA Bank Kenya who both acted as Arrangers.
