Written by Faith Mwende
The Central Bank of Kenya (CBK), acting as the fiscal agent for the Republic of Kenya, has officially announced the reopening of two long-term infrastructure bonds one with 15 years to maturity and the other with 19 years. The bonds, valued at a total of KES 90 billion, are targeted toward funding critical infrastructure projects across the country.
The two bonds on offer are IFB1/2018/015 and IFB1/2022/019, with remaining tenors of 7.5 years and 15.6 years, respectively. Investors are invited to submit their bids starting July 21, 2025, with the bidding period closing on Wednesday, August 13, 2025, by 10:00 AM. The auction is set to be conducted on the same day, with successful bids settled on August 18, 2025.
Attractive Returns for Long-Term Investors
The coupon rates for the bonds are notably attractive, set at 12.500% for IFB1/2018/015 and 12.965% for IFB1/2022/019. These rates are expected to entice long-term investors, particularly institutional players and high-net-worth individuals seeking stable, tax-free returns, as both bonds are exempt from withholding tax.
The CBK outlines distinct amortization and redemption structures for each bond. For IFB1/2018/015, 40% of the unencumbered principal will be redeemed on January 17, 2028, with the remaining 60% paid out in full on the final maturity date of January 10, 2033. Similarly, IFB1/2022/019 will see a 50% redemption on February 9, 2032, and full redemption of the remaining amount on January 28, 2041.
The amortization scheme includes a provision for partial redemptions of amounts up to KES 1 million per CSD account, which will be paid out in full at the time of amortization.
Bidding Terms and Conditions
CBK has set the minimum non-competitive bid amount at KES 50,000 and the maximum at KES 50 million. For competitive bids, a minimum of KES 2 million per tenor per CSD account is required. Interested investors can participate through the CBK DhowCSD Investor Portal or App, where successful bidders will be expected to obtain their payment keys and amounts due by Friday, August 15, 2025.
CBK has also warned that defaulters may be suspended from participating in future government securities, while pledged securities not cancelled at least five days before the amortization date will be transferred to the respective lenders and paid accordingly.
Secondary Market Activity
To enhance liquidity, CBK has scheduled the commencement of secondary trading in multiples of KES 50,000 starting Monday, August 18, 2025, for both bonds. This move is expected to boost trading activity in the secondary market and offer exit opportunities for investors who may wish to liquidate before maturity.
Strategic Move to Fund Infrastructure
The reopening of these bonds underlines the government’s commitment to financing infrastructure development sustainably. With Kenya’s rising infrastructure needs, the KES 90 billion raised is expected to be channeled toward key sectors such as transport, energy, and water.
The issuance marks another significant step in the government’s broader debt management strategy shifting toward longer-term, domestic funding sources that support economic growth without exerting pressure on foreign reserves.
