Safaricom’s launch of a KSh15 billion tax-exempt Green Bond, the first tranche of its KSh40 billion domestic note programme, has drawn keen interest across Kenya’s retail and institutional investor community.
Beyond its sustainability credentials, the offer presents a financial proposition that stands out in a market where investors have long relied on Saccos, bank deposits and equities for returns.
The bond, open between November 25 and December 5, offers a 10.4 percent coupon free of withholding tax. In a market where yields are frequently eroded by the 15 percent tax levied on interest income, the tax advantage sharply improves the effective return for investors. A comparable conventional corporate bond yielding 12 percent would deliver roughly the same net return once tax is deducted, giving Safaricom’s issuance an immediate competitive edge.
For retail savers, bank deposits remain the most accessible but also among the lowest-yielding products. Average savings accounts deliver two percent to four percent, while even fixed deposits at top-tier banks generally range between six percent to nine percent before tax, depending on tenor and volume. After tax, the effective rate declines further, leaving the Safaricom paper significantly ahead.
PAYOUT GUARANTEED
Saccos—long considered a middle ground between low-yield deposits and volatile equities, typically pay seven percent to twelve percent dividends or interest on deposits, depending on performance and liquidity. While some popular Saccos may match or slightly exceed the bond’s nominal coupon, their payouts are neither guaranteed nor tax-exempt. Many face liquidity pressures or delayed dividend cycles, factors that cautious investors increasingly weigh.
Equities on the Nairobi Securities Exchange have historically offered the prospect of capital appreciation alongside dividends. But the past five years have been marked by price volatility, foreign investor outflows and weak earnings across several blue chips.
Safaricom, itself long seen as a bellwether, has experienced wide price swings. Against this backdrop, a fixed, predictable, tax-free return from the same company may appeal to investors seeking stability without abandoning the brand.
Safaricom says proceeds from the green bond will finance eligible environmental projects, supporting energy efficiency, network modernisation and climate-aligned infrastructure.
Chief executive Peter Ndegwa described the issuance as a way of embedding sustainability “at the heart of our business,” while diversifying long-term funding.
“This Green Bond underscores our commitment to embedding sustainability at the heart of our business. By adopting innovative financing solutions, we create long-term value for our stakeholders while delivering positive environmental and social impact. This approach will continue to guide our growth, ensuring that every step forward is both purposeful and sustainable,” said Mr Ndegwa.
HIGHER YIELDING
For investors comparing options in late 2025, the bond sits in a unique space: higher-yielding than bank deposits, more predictable than equities, and more tax-efficient than Saccos.
In a tightening economic climate, that combination may prove compelling for savers seeking both impact and income.
Investors can participate with a minimum of KSh50,000 and top up in multiples of KSh10,000.
Applications process is simple via USSD *483*810#, online at https://safaricombond.e-offer.app/ or through licensed stockbrokers.
