NAIROBI, Kenya, May 4 – Kenya Electricity Generating Company (KenGen) has presented the Information Memorandum for the proposed Public Infrastructure Bond Offer to the Capital Markets Authority (CMA) for approval.
KenGen Managing Director Eddy Njoroge said on Monday that this was an important step as the proposed PIBO would only come to the market after the requisite approval had been obtained from CMA.
Mr Njoroge explained that the structure of the proposed PIBO which will give both institutional and retail investors an opportunity to participate will be unveiled once CMA approves the Information Memorandum (IM) and any other necessary requirement.
The KenGen PIBO comes on the back of the recent Government of Kenya Sh18.5 billion infrastructure bond which was over-subscribed by over 45 percent and which demonstrates an unsatisfied demand for long term debt instruments.
These are the vehicles that the company hopes to use to finance investments in additional power generation capacity so as to cope with the rising demand, anticipated at eight percent annually.
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.
The 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.
The transaction team for the proposed PIBO comprises of KPMG as the financial advisors, Standard Chartered Bank the lead arranger, and Standard Investment Bank as the lead sponsoring broker.