Kenya's Eurobond issue to upgrade country's infrastructure
Kenya would be utilizing the proceeds of the sale of as much as USD2 billion worth of Eurobonds in order to upgrade the country's infrastructure to handle the demands of the burgeoning economy. This was confirmed by Kenya's Treasury Secretary Henry Rotich.
The said securities would have a maturity of ten years and would be sold within the first half of January. In an interview conducted last November 7 in the country's capital, Nairobi, Kenya would be paying as high as 8% for the planned sovereign debt. This issue would match the continent's largest done by South Africa. This was value was confirmed by Jyske Bank AS's Morten Groth and Aberdeen Asset Management's Kevin Daly.
In the interview, Rotich said, "We have massive infrastructure plans with key transformative projects we need to invest in now to take our growth to a higher level."
The stability of the country has led many large corporations such as Toyota Motor Corp and Google Inc to set up regional hubs in Nairobi. While there are pockets of terrorism, the government had maintained its economic growth forecast between 5.5% and 6% from just 4.6% in 2012.
The country is the world's biggest exporter of black tea. It has set a target to double its economic growth to 10% per year with the goal to create a million jobs per year and reach middle income nation by 2030.
Rotich confirmed that the bond isssue would pay off USD600 million syndicated loan contracted by the government in 2012. The remainder of the proceeds would be used towards the creation of energy projects including drilling for geothermal steam as well as the expansion of the power-transmission network, The government said it would take investment of USD15 billion to add on 5,500 megawatts of power by 2017 to the existing 1,700 megawatts.