Safaricom’s green bond was oversubscribed by a whopping 176 per cent after investors poured in Sh41.6 billion in bids for the telecom giant’s inaugural Sh15 billion issuance, forcing the company to accept Sh20 billion and refund Sh21.6 billion to eager participants in one of Kenya’s most successful corporate debt raises in recent memory.
The overwhelming response closed on Friday evening, just two weeks after the bond opened for subscriptions on November 25 under Safaricom’s freshly approved Sh40 billion Medium-Term Note programme by the Capital Markets Authority.
This first tranche, branded as a green bond to fund eco-friendly initiatives, drew applications from a diverse pool of local banks, pension funds, and high-net-worth individuals who snapped up the tax-exempt notes faster than expected. The greenshoe option was fully exercised, allowing an extra Sh5 billion in case of high demand and capping the uptake at the maximum allowable Sh20 billion.
During a brief media briefing at Safaricom House on Tuesday morning, Safaricom Chief Executive Officer Peter Ndegwa hailed the outcome as a resounding vote of trust. “The strong uptake reflects investor confidence in the company’s balance sheet and strategic direction,” Ndegwa said, adding that the market response has affirmed Safaricom’s push to diversify funding sources beyond traditional bank loans.
With the company’s debt standing at Sh117 billion as of September 2025, including Sh61.2 billion in long-term borrowings, this green bond provides a timely, cost-effective infusion without diluting shareholder equity.
The five-year notes carry a fixed interest rate of 10.4 per cent per annum, payable semi-annually in June and December, maturing in December 2030. Being tax-exempt under Kenyan law, the yield effectively boosts returns for investors compared to taxable alternatives like government bonds trading around 13 per cent for similar tenors.
Listing and trading on the Nairobi Securities Exchange is slated to commence on Tuesday, December 16, potentially injecting fresh liquidity into the otherwise sluggish corporate debt segment, where outstanding notes total just Sh25.9 billion as of September.
Proceeds will strictly finance eligible green projects aligned with Safaricom’s sustainability agenda, aiming to slash the company’s carbon footprint amid its aggressive 4G and 5G rollout. Key initiatives include expanding solar power installations at remote base stations to cut reliance on diesel generators, which currently guzzle millions of litres annually and spew thousands of tonnes of emissions.
Upgrades to advanced power management systems will optimise energy use across the network, while broader efforts target a 20 per cent reduction in overall electricity consumption by 2030.
This move builds on Safaricom’s prior sustainability efforts, such as the Sh30 billion green loan secured from a consortium of local banks in 2023 for similar eco-upgrades.
“We’re not just talking green; we’re investing in a resilient network that powers Kenya’s digital future while protecting the planet,” Ndegwa emphasised. The projects could save up to Sh2 billion in operational costs over the bond’s life through efficiency gains, indirectly benefiting shareholders via stronger margins.
Market watchers see the oversubscription as a bellwether for Kenya’s nascent green finance sector. Valerie Okello, research analyst at Capital A Investment Bank, noted that the “greenium” premium – where investors accept slightly lower yields for ESG-aligned instruments – drove the frenzy.
“Safaricom’s low-risk profile, massive 40 million customer base, and global ESG trends made the acquisition a no-brainer,” she told Business Daily. The bond’s success outpaces recent peers like East African Breweries’ Sh16.7 billion tranche in 2024, which saw modest oversubscription, and signals a reviving appetite for corporate paper amid falling interest rates.
For investors, the tax break sweetens the deal in a high-inflation environment where real returns on fixed income have eroded. Pension funds like the National Social Security Fund and Retirement Benefits Authority, which reportedly led the bids, gain stable, ethical yields to match their mandates. High-net-worth individuals, squeezed by volatile equities, found the 10.4 per cent rate attractive versus bank fixed deposits hovering at 9 per cent.
Safaricom’s green pivot arrives as the telco navigates headwinds: voice revenue dipped slightly due to market saturation, while data and fintech segments like M-Pesa drove 52 per cent net income growth to Sh52.1 billion in the half-year to September.
Ethiopia investments, pegged at Sh18-21 billion, add pressure, but the bond eases liquidity strains without hiking short-term debt, which sits at Sh55 billion.
As trading kicks off next week, analysts predict robust secondary market activity, potentially setting a template for more green issuances from firms like KCB and Equity Bank. For Safaricom, this isn’t just funding – it’s a stake in tomorrow’s cleaner, connected Kenya, where every solar panel at a mast powers progress and preserves the savannah. With bids surpassing the target, it is evident that investors are placing significant bets on the sustainability of the green giant.
