This archive report was first published on 30 September 2019.
Kenya's leading power producer, KenGen, has redeemed its Ksh. 25 billion infrastructure bond issued in 2009. The bond, which was priced at par and carried a 12.5% annual coupon, was issued on November 2, 2009, when Hon. Uhuru Kenyatta was still the Finance Minister.
According to a statement issued by KenGen, the company made the final payments to its bond holders by Thursday, October 31, 2019. The interest payment was at a fixed rate of 12.5% per annum and was tax exempt on the principal amount of the bonds outstanding on the record date.
KenGen's infrastructure bond has a good take-up rate due to the tax-breaks offered to bond holders. The company generates 80% of Kenya's electricity requirements and sought funds from the bond to invest in diverse sources of renewable energy like geothermal, in line with its strategy of investing at least Sh 40 billion in generation each year to keep up with rising demand.
During the launch ceremony in 2009, then Finance Minister, Uhuru Kenyatta, said that Kenya's capital market is vibrant enough to support the company's bond and the government's own targeted borrowing requirements, which stood at Sh 109.5 billion at the time.
