Safaricom has closed a multi-million Sustainability Linked Loan (SLL) to bolster its Environmental, Social and Governance (ESG) agenda.
The network operator announced that it has entered into a deal worth KES 15 billion, which can be increased to KES 20 billion through an accordion feature. This is the biggest ESG-linked loan facility ever taken in East Africa and is a first of its kind for Safaricom. It is also the first Kenya Shilling-denominated SLL available 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 PLC.
The investment is also expected to contribute to the growth of Kenya’s
sustainable financing market, which remains a key priority for the Government
of Kenya 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 provided by a consortium of four banks consisting of Standard
Chartered Bank, Stanbic Bank, ABSA Bank and KCB Bank, and 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
said.
The SLL 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.