KenGen to fully redeem its Ksh.25 Bn bond offer

East Africa’s electricity generator, Kenya Electricity Generating Company (KenGen) is inching closer to fully redeeming its Ksh.25 billion Public Infrastructure Bond Offer (PIBO).

The company has made the second last instalment redemption for the Infrastructure Bond amounting to Ksh 1,562.5 million and interest payment of Ksh 193.7 million to its bond holders.

Speaking earlier today, KenGen Managing Director and CEO, Mrs Rebecca Miano said the second last instalment redemption of the 10-year PIBO was paid on April 30 and the last instalment redemption and interest is due for payment on 31^st October 2019.

“The Ksh.25 billion PIBO was floated in 2009 with an interest of 12.50 per cent to be paid semi-annually together with sixteen equal redemptions of which fifteen have since been paid. The last instalment redemption and interest is due for payment on 31^st October 2019,” the MD said.

Mrs. Miano observed that KenGen has consistently and promptly paid interest and principal to bondholders. “We are grateful to the bondholders who have shown confidence in the company by investing in the bond,” she added.

The purpose of the bond was to finance the firm’s energy projects. The company has been able to utilise the same towards increasing its installed capacity by 60 per cent from 1,021MW in 2009 to its current capacity of 1,631MW, leading to increased operations that have seen the company grow its revenue almost threefold from Ksh.13.1 billion in 2009 to Ksh 35.9 billion in 2018.

Infrastructure bonds are essentially issued for purposes of financing infrastructure projects of public interest.

The KenGen PIBO was well received by investors. Unlike other securities, infrastructure bonds are tax-free, making them more attractive to investors who include foreign buyers.

The KenGen PIBO was and remains the only corporate infrastructure bond that has ever been issued and traded on the Nairobi Securities Exchange (NSE).