Laikipia County seeks infrastructure bond to fund development projects – KBC

Laikipia County is in an ongoing process to float a Ksh 1.4 billion infrastructure bond to fund capital-intensive development projects in the County.

The bond will be a first for the devolved units seeking funds through the capital markets to fund smart towns and irrigation.

Governor Ndiritu Muriithi says they will also equip hospitals in the County at a cost of three to four hundred million shillings through leasing as a financing option.

Governor Muriithi, who is the chair of the Finance, Planning and Economic Affairs Committee at the Council of Governors, said the county bond was at an advanced stage, and they have the framework in place.

But with more counties expected to join the bandwagon in assessing their creditworthiness in order to utilize alternative means to mobilize funds, the issue of pending bills is not lost on counties and financial institutions.

Laikipia County joined the list of pioneer counties with a credit rating, a year after Makueni, Kisumu and Bungoma Counties received their credit ratings.

The three pioneer counties were rated under the World Bank-funded Kenya county creditworthiness initiative, which is a collaboration between the National Treasury, the Commission on Revenue Allocation (CRA) and the Capital Markets Authority (CMA).

Under the Public Finance Management (PFM) Act, the National Treasury guarantees borrowing by counties.

Cabinet Secretary Ukur Yatani, who gave the nod to the bid to seek financing through alternative means, said Counties are allowed to borrow as long as they meet the parameters set by the PFM Act.

The County has also received its first credit rating report which has indicated a stable outlook for the county.

Laikipia’s most recently audited books for the financial year 2019-2020 show its revenue was Ksh 7.113 billion, meaning 20 per cent would be Ksh 1.4 billion.

Laikipia has been releasing quarterly and annual financial results. In 2018, it became the first county to produce a statistical data abstract, providing key information on all sectors of the economy, crucial information for investors.