Safaricom’s first green bond under its Sh40 billion MTN programme was oversubscribed by more than 170 percent, reflecting strong investor confidence.
Chief Financial Officer Dilip Pal said on Monday that the response showed faith not just in the brand, but in capital markets and sustainability-linked investment as Safaricom reshapes its long-term funding strategy.
“For us, I think it just shows that when we are executing our strategy, and as part of the strategy, how you raise capital is also part of the strategy,” he said.
He noted that the decision to begin the programme with a green bond was deliberate, anchored on the company’s long-term sustainability goals.
Safaricom opted for a Sh15 billion green bond with a Sh5 billion green shoe option as the first step in the MTN programme, despite having an overall ceiling of Sh40 billion.
Pal said timing the market perfectly is never possible, but clarity of purpose was key.
“One thing for us was very clear, is the purpose of why we are raising capital, and we are raising capital to really create a sustainable green digital future, and that’s what the investment proceeds will go” he said.
Beyond Safaricom’s brand strength, the CFO said the strong uptake pointed to broader confidence in capital markets.
“I think beyond the brand, it also talks about the confidence in the capital market, confidence in the capital markets, in a way investors are willing to look at long-term investment,” Pal said.
He added that investors were increasingly prepared to back fixed income instruments in a market that is still developing.
He suggested the success of the issue could encourage other issuers. “We believe that probably this could be one of those moments where there will be more and more confidence of capital raising by other issuers who can come to the market and be confident about raising markets based on their reason why they’re doing it,” he said.
Pal also highlighted a strategic shift in how Safaricom approaches funding. Historically, the company carried limited debt on its balance sheet, relying largely on internal cash flows.
As the business expanded and investment needs grew, borrowing increased, but the approach has now become more deliberate.
“In the past, I think we have been more reactive to a demand,” he said. “Then now being very proactive, managing the capital structure in a way that allows us to make it more flexible and make it more long term and sustainable.”
He explained that the MTN programme allows Safaricom to balance short-term and long-term funding, while smoothing repayment profiles and strengthening confidence around cash flows.
The move into fixed coupon instruments also adds flexibility compared to earlier borrowing.
“We had variable rates and some of the long-term loan that we have taken before. Here we are in the market with a fixed coupon rate,” Pal said, describing it as a form of natural hedging.
Looking ahead, Pal said future tranches under the Sh40 billion programme would retain flexibility in structure and purpose.
The MTN framework allows for green bonds, sustainability-linked notes and conventional instruments.
“It’s a beautifully crafted programme in a way that it has flexibility for us to issue green bonds, for us to issue sustainability notes, and also vanilla bonds,” he said.
While it is too early to outline the exact size and timing of the next issuance, Pal made clear that sustainability would remain central.
“It is fair to say that our purpose is anchored on sustainability, there would definitely be a flavor of sustainability in everything that we do, even for the future offerings,” he said.
For now, Safaricom’s focus is on deploying the proceeds from the first tranche to support its investment plans.
The strong response, however, positions the company as a bellwether for Kenya’s evolving capital markets and highlights growing appetite for sustainability-linked investments.
