In a groundbreaking move towards advancing sustainability and responsible financing in Kenya, Safaricom (NSE: SCOM) has announced the successful closure of a historic multi-billion Sustainability Linked Loan (SLL).
This monumental deal, worth KES 15 billion and scalable up to KES 20 billion, marks a significant stride for Safaricom’s Environmental, Social, and Governance (ESG) agenda. It signifies a notable shift in the Kenyan financial landscape towards embracing ESG principles, with Stanbic Bank playing a pivotal role in this transformation.
Safaricom’s commitment to sustainable business practices and ESG principles is echoed by its CEO, Peter Ndegwa, who stated, “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 manage our ESG footprint comprehensively.” This loan serves as a testament to Safaricom’s determination to align its financial strategy with its sustainability objectives.
Stanbic Bank and a consortium of three other prominent banks – Standard Chartered, Standard Bank, ABSA, and Kenya Commercial Bank (KCB) – played a pivotal role in making this monumental loan facility a reality. This consortium’s collective effort has propelled Safaricom into the annals of East Africa’s largest-ever ESG-linked loan facility, marking a watershed moment for sustainable financing in the region.
Kariuki Ngari, Chief Executive Officer of Standard Chartered Bank Kenya, representing the consortium, expressed their enthusiasm, stating, “This significant milestone indicates the continued momentum towards building a more robust sustainable and diversified financial ecosystem in the region. 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.”
The Sustainability Linked Loan (SLL) will enable Safaricom to access funding based on its progressive achievement of set milestones across key ESG areas. This financing mechanism not only aligns Safaricom’s financial strategy with its sustainability objectives but also serves as a model for other companies in Kenya and East Africa looking to follow suit.
Safaricom’s focus on strategic sustainable investments is at the heart of its ongoing transition to becoming a fully-fledged technology company by 2025. The SLL will facilitate the pursuit of initiatives that reduce emissions to reach Net Zero targets, track gender diversity, and monitor social equality impacts. This multifaceted approach underscores the comprehensive commitment of Safaricom to sustainability across all aspects of its operations.
This historic SLL with Safaricom is expected to pave the way for further sustainability financing initiatives in Kenya and the wider region. As companies increasingly acknowledge their role in responsible ESG reporting and financing, Stanbic Bank and its consortium partners are at the forefront of fostering a new era of inclusive and responsible investment.
Stanbic Bank’s role as the Global Coordinator, Sustainability Coordinator, and Mandated Lead Arranger for this landmark deal underscores its dedication to fostering sustainable finance and its pivotal role in driving positive change within the Kenyan financial landscape. Kenya Commercial Bank’s involvement as a Mandated Lead Arranger, along with the contributions of Standard Bank and ABSA Bank as Arrangers, further highlights the collective commitment of these institutions towards advancing sustainable finance practices.
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