- Why did Kenya issue the infrastructure bond?
- What factors contributed to the attractiveness of the infrastructure bond?
In response to budget constraints, the Kenyan government issued two infrastructure bonds in the fiscal year 2023/2024 to support its infrastructure projects. The initial offering, a Kes 50 billion ($334 million) bond with a six-and-a-half-year amortisation period, was floated on October 20th, 2023. This bond garnered considerable attention, achieving a 177.8% oversubscription and a final coupon rate of 17.9%. Following this success, a second bond was issued on January 19th, 2024. This bond, larger at Kes 70 billion ($429 million), was set for an eight-and-a-half-year maturity.
Fiscal year 2023/2024 also saw a significant allocation for development projects, representing 20.2% of the total budget or Kes 743.5 million ($4.8 billion) from a total of Kes 3.68 trillion ($24.0 billion). Within this allocation, infrastructure projects constituted 63% of development spending. Although this marked a 12.4%
