Safaricom is set to refund Ksh21.4 billion to investors following an unprecedented oversubscription of its green bond by 175.7%.
In a press release, the telecommunications firm announced that it had targeted Ksh15 billion for the first tranche of its Medium-Term Note Programme but received applications totalling Ksh41.6 billion — a 175.7% oversubscription.
Therefore, the company will exercise its full Ksh5 billion greenshoe option, raising the tranche allocation to Ksh 20 billion, the maximum approved for this issuance.
Despite this adjustment and in accordance with the allotment terms and conditions set out in the Information Memorandum, Safaricom will refund Ksh21.4 billion to investors in what is set to be one of the largest refunds in Kenya’s corporate debt market.
Market Confidence in Safaricom
Safaricom Chief Executive Officer Peter Ndegwa said the refund signifies the strength of investor confidence in Safaricom’s strategy.
“We are pleased with the market’s response. It signals confidence not only in our balance sheet but also in the vision and strategy we are executing. We made a deliberate decision to diversify our funding sources, and this outcome affirms this choice.”
According to the press release, Safaricom announced that proceeds from the green note will fund projects aimed at improving operational efficiency, reducing environmental impact, and strengthening the telecommunication firm’s sustainability agenda.
Planned investments include renewable energy initiatives such as expanding solar power across more base stations, upgrading transmission systems, and enhancing power management to cut energy consumption.
Ndegwa reiterated that the greenshoe option is an excellent initiative, as it allows more investors to participate.
“The green shoe option allows more investors to participate in Safaricom’s growth, rather than locking them out. We are pleased to provide a broader range of investment opportunities as the company continues to expand.”
He thanked investors, transaction advisers, and the Capital Markets Authority for enabling the successful issuance of Tranche 1.
The giant telco stated that the green notes will list on the Nairobi Securities Exchange on Tuesday, December 16.
The five-year fixed-rate instrument, priced at 10.4%, will pay interest semi-annually in June and December.
The interest income will be tax-exempt, which is a key attraction for investors seeking effective returns.
Medium-Term Note Programmes in Kenya
Medium-Term Note (MTN) Programmes have become a preferred financing tool for Kenyan corporates seeking flexible, long-term capital.
Approved by the Capital Markets Authority, these programmes allow issuers to raise funds in multiple tranches rather than a single large issuance, giving companies room to respond to market conditions while offering investors predictable returns.
Over the past decade, MTNs have shaped Kenya’s corporate debt market, with several major companies taking part.
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East African Breweries Limited (EABL) recently recorded a 52% oversubscription on its KES 16.76 billion bond issue, aimed at refinancing debt and supporting operations.
Similarly, Centum Investments has tapped MTNs to fund real estate and investment projects, while Acorn Group made history in 2019 by issuing Kenya’s first certified green bond under its MTN framework to finance sustainable student housing.
Safaricom’s Ongoing Sustainability Projects
Safaricom has, over the years, rolled out several sustainability projects to reduce carbon emissions and improve energy efficiency across its network.
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The company has been gradually replacing diesel-powered generators at base stations with hybrid systems and expanding the use of solar installations in remote areas.
It has also undertaken network modernization programmes designed to lower electricity consumption by adopting more efficient transmission equipment.
The firm’s environmental strategy includes waste reduction measures such as device recycling initiatives and the transition to biodegradable SIM card packaging.
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