NAIROBI, Kenya, Mar 10 – The Kenya Electricity Generating Company (KenGen) has announced its list of transaction advisors for the Sh15 billion Public Bond Offer(PBO) targeted for mid this year.
KPMG will be the financial advisors, Standard Chartered Bank the lead arranger, and Standard Investment Bank the lead sponsoring broker.
Other members of the transaction team are; Hamilton Harrison & Mathews as the legal advisors, PWC as the reporting accountants, and Ernst & Young as the auditors. Lowe ScanAd and Ogilvy PR will handle advertising and communications respectively.
The KenGen PBO comes on the back of the recent Sh18.5 billion Government infrastructure bond which reported a 45 percent over-subscription, with bids for Sh26.9 billion received.
“This demonstrates there is an unsatisfied demand for long-term debt instruments, which KenGen would like to use to finance investments in additional power generation capacity,” KenGen Managing Director Eddy Njoroge said.
KenGen’s decision to seek funds from the Debt Capital Market is a break from the past where the company relied heavily on development financial institutions to finance its power generation projects.
“The Debt Capital Market gives KenGen an opportunity to raise funds to finance our capital expenditure in a flexible manner, while at the same time allowing Kenyans to participate in infrastructural development through an attractive investment opportunity,” Mr Njoroge said.
He noted that investment in additional power generation capacity through the bond is part of KenGen’s five-year strategy (2008-2012) of increasing its capacity by 500 MW to stabilise the power situation in Kenya.
“This will enable us continue with our critical role of ensuring there is enough additional capacity to cope with the rising demand, anticipated at eight percent annually,” Mr.Njoroge said
Investment in additional generation capacity will not only help the country cope with additional demand, but also the power demand associated with the implementation of Vision 2030.
He said the transaction team has begun work on the framework of the proposed PBO which will give both institutional and retail investors an opportunity to participate.
“The retail component of the proposed PBO will be structured to allow broad-based participation from as many Kenyans as possible,” observed the Managing Director.
Mr Njoroge said other features and details of the PBO will be announced once regulatory approvals have been received from the Capital Markets Authority.