NAIROBI—Safaricom PLC (NSE: SCOM) on Tuesday, November 25, 2025, launched the first tranche of its Sh40 billion domestic bond program, issuing a Sh15 billion green bond aimed at financing environmentally sustainable projects. The issuance, which is the largest of its kind in Kenya to date, signals a significant step in mobilizing private capital to address climate change and advances the nation's sustainable development agenda.

The five-year bond offers investors a fixed annual interest rate of 10.4%, which is exempt from withholding tax under Kenyan law. This tax incentive makes the effective yield equivalent to approximately 12.35% for taxable instruments, a competitive return designed to attract both retail and institutional investors. The offer period runs from Tuesday, November 25, 2025, to Thursday, December 5, 2025. The firm has an option to accept an additional Sh5 billion, potentially raising the total to Sh20 billion, if the offer is oversubscribed.

In a statement released on Tuesday, Safaricom Chief Executive Officer Peter Ndegwa said the bond aligns with the company's core strategy. “This Green Bond underscores our commitment to embedding sustainability at the heart of our business,” Ndegwa stated. “By adopting innovative financing solutions, we create long-term value for our stakeholders while delivering positive environmental and social impact.”

Strategic Financing for a Greener Footprint

Proceeds from the bond are earmarked exclusively for financing or refinancing eligible green projects under Safaricom's Sustainable Finance Framework. These initiatives include transitioning the company's network sites to solar power, investing in energy efficiency, developing climate-resilient infrastructure, and expanding clean transportation solutions. The move is part of Safaricom's broader ambition to become a purpose-led technology company by 2030.

The Capital Markets Authority (CMA) granted approval for Safaricom's Sh40 billion Domestic Medium-Term Note Programme on November 7, 2025, under the Capital Markets Act. This framework allows Safaricom to issue various types of notes, including green, social, and sustainability bonds, in multiple tranches, providing financial flexibility for its long-term investment plans in Kenya and Ethiopia.

Group Chief Finance Officer Dilip Pal highlighted the bond's strategic importance for diversifying the company's funding sources. “This transaction marks a major milestone in our strategic financing plans, enabling Safaricom to diversify funding sources and tap into the local debt capital market,” Pal said on Tuesday. He noted that the bond is not only Kenya's largest but also the first to permit subscriptions via mobile platforms, enhancing accessibility for retail investors. The minimum investment is Sh50,000, with subsequent top-ups in increments of Sh10,000.

Boosting Kenya’s Green Finance Market

Safaricom's issuance is poised to revitalize Kenya's corporate bond market, which has seen limited activity in recent years. The successful Sh16.7 billion bond issue by East African Breweries Limited (EABL) in November 2025 indicated a renewed appetite for corporate debt among investors. Safaricom's strong credit profile and the growing global and local demand for ESG-linked investments are expected to drive strong demand for the bond.

The concept of green bonds was pioneered globally in 2008 by the World Bank to fund climate-action projects. In Kenya, the market began to take formal shape following the launch of the Kenya Green Bonds Programme in 2017. The first green bond, a Sh4.3 billion issuance by property developer Acorn Holdings, was listed on the Nairobi Securities Exchange (NSE) in 2019 to finance eco-friendly student housing. The Kenyan government has supported the market's growth by providing tax exemptions for green bonds with a tenor of at least three years.

The bond is scheduled for allotment on December 8, 2025, and will be listed for trading on the Nairobi Securities Exchange on December 16, 2025. The joint lead arrangers for the transaction are SBG Securities Limited and Stanbic Bank Kenya Limited, with Dyer and Blair Investment Bank and Standard Chartered Bank Kenya Limited also serving as placing agents.