Kenyan Banks Back Safaricom's Sustainability Agenda

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by KnowESG
KnowESG_Kenyan Banks Back Safaricom's Sustainability Agenda
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Safaricom has unveiled its successful acquisition of a multi-billion Sustainability Linked Loan (SLL) as part of its commitment to bolster its Environmental, Social, and Governance (ESG) initiatives.

This groundbreaking deal, valued at KES 15 billion and expandable to KES 20 billion through an accordion feature, represents the largest ESG-linked loan facility ever embarked upon in East Africa. It marks a historic milestone for Safaricom and the Kenyan financial landscape as the first-ever Kenya Shilling-denominated SLL.

Peter Ndegwa, the Chief Executive Officer of Safaricom PLC, expressed the significance of this funding in advancing their sustainable business agenda. He highlighted its potential to catalyse diverse investments aimed at supporting transformative technologies, systems, and services, ultimately enhancing their ESG footprint management.

This investment is expected to play a pivotal role in the growth of Kenya's sustainable financing market, aligning with the government's Vision 2030 objectives. Ndegwa emphasised that the deal underscores Safaricom's commitment to partnering for growth and transforming lives.

The consortium of four banks, comprising Standard Chartered Bank, Stanbic Bank, ABSA Bank, and KCB Bank, will provide the necessary funding to Safaricom. This financing will be contingent on Safaricom's progressive achievement of predefined milestones in critical ESG areas.

Kariuki Ngari, Chief Executive Officer of Standard Chartered Bank Kenya, representing the consortium, hailed this milestone as evidence of the region's growing momentum towards establishing a robust, sustainable, and diversified financial ecosystem. He also noted the rising interest in sustainable finance products and climate initiatives.

The Sustainability Linked Loan (SLL) will empower Safaricom to intensify its strategic investments in sustainability. It aligns with the company's ongoing transformation into a full-fledged technology firm by 2025. Key focus areas include reducing emissions to attain Net Zero targets, monitoring gender diversity, and assessing social equality impacts.

Furthermore, this deal sets the stage for expanded sustainability financing initiatives across the region as companies increasingly prioritise ESG reporting and financing accountability.

Standard Chartered Kenya played a pivotal role in this endeavour, serving as the Global Coordinator, Sustainability Coordinator, and Mandated Lead Arranger. Kenya Commercial Bank acted as the Mandated Lead Arranger, while Stanbic Bank Kenya and ABSA Bank Kenya served as Arrangers in this transformative partnership.

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Source: Safaricom

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