Kenya seeks to raise $296 million from the domestic market for infrastructure projects in the energy, water and transport sectors through the sell of 15-year infrastructure bond.
The country’s Central Bank says this will be achieved by selling a 15-year infrastructure bond to raise funds to boost infrastructure in the country. Kenya is carrying out a number of infrastructure projects that include construction of power plants and bypasses funded by both donors and the government.
In the recent newspaper advertisement the bank added that the bond will have a 12 percent coupon. It will take bids until October 18 and auction the paper on October 19.
Already an estimated Sh5.56 trillion investment into infrastructure development for Kenya is planned, the majority of which will focus on telecommunications and power generation infrastructure.
Kenya’s investment as a percentage of GDP rose from 18 per cent in 2000 to hit a high of 22.4 per cent in 2014 before receding to 21.2 per cent last year and is projected to rise to 22.5 per cent this year.
Despite having made significant progress in infrastructure development in recent years, the country’s infrastructure indicators remain below the levels found in Africa’s middle-income economies, like Egypt or Nigeria.
Analysts say bringing Kenya’s infrastructure up to the level of the region’s middle-income countries could boost annual growth by more than three percentage points.
This will be a major boost to Kenya’s transport sector that have been in the past few months on the rising as the governments seeks to have more projects done.
Currently, there are many transport and water projects ongoing including the Famous Kenya’s standard gauge railway which has been facing huddles and its expected that the government will add more projects before the end of the year.
The government of Kenya seems to be committed towards improving the infrastructure sector as that remains their key selling point.
On the other hand it will be a being reap to the Chinese construction companies which have been highly winning the tenders.
Kenya’s domestic debt currently stands at 18 billion dollars, with the amount having ballooned in the last three weeks as the government seeks to capitalize on falling yields to borrow more cheaply from the public.