Kenya will sell a 15-year infrastructure bond to raise up to US$296 million this month to fund road, water and energy projects, the country’s central bank announced last week.
The bank said the bond will have a 12 percent coupon and will take bids until 18 October before auctioning the bond the following day. An estimated 5.56 trillion shillings (US$55 billion) investment into infrastructure development for Kenya is already planned, the majority of which will focus on telecommunications and power generation infrastructure.
Kenya’s infrastructure investment as a percentage of GDP rose from 18 percent in 2000 to hit a high of 22.4 percent in 2014 before receding to 21.2 percent last year and is projected to rise to 22.5 percent this year. Despite having made significant progress in infrastructure development in recent years, the country’s infrastructure indicators remain below the levels found in Africa’s middle-income economies, like Egypt or Nigeria.
Analysts say bringing Kenya’s infrastructure up to the level of the region’s middle-income countries could boost annual growth by more than three percentage points.