A year after it received the first tranche of a sustainability loan, Safaricom PLC has secured the second tranche of KShs. 15bn from KCB, ABSA, Standard Chartered, and Stanbic to advance its Environmental, Social and Governance agenda.

• The Sustainability Linked Loan (SLL), which the telco says is the largest of its kind in the region, will be channelled to strategic sustainable investments.
• The loan is a first of its kind in several ways: its Safaricom’s first venture into such financing, the first to be SLL denominated in the Kenyan Shilling
• As a telco, Safaricom has a high carbon footprint that it plans to reduce to net zero by 2050.

“This deal helps to accelerate the advancement of our sustainability agenda. It is a testament that we have achieved the targets we set out to achieve with the first one where we aligned our sustainability agenda with our financial strategy,” Peter Ndegwa, Safaricom’s CEO said in a statement to newsrooms.

The telco has been replacing its energy sources, upgrading 23% of its Base Receiver Stations (BTS) to solar, and strategising how to eliminate the use of diesel at BTSes.

An SLL is a unique loan where the interest rate is tied to the borrower’s sustainability performance, specifically tailored to their ESG targets. Meeting these targets leads to reduced interest payments.

In the bank consortium funding the loan, Standard Chartered acted as Mandated Lead Arranger and Bookrunner Global Coordinator and Sustainability Coordinator for the transaction; KCB acted as Mandated Lead Arranger; while Stanbic Bank Kenya and ABSA Bank Kenya both acted as Arrangers.