The government has issued a KSh 44.79 billion infrastructure bond on the Nairobi Securities Exchange to finance the construction of the Talanta Sports City Stadium, a flagship facility for the 2027 Africa Cup of Nations.
Linzi FinCo 003 Trust, part of the Pan‑African Liaison Group, structured the bond as a 15‑year Infrastructure Asset‑Backed Security (IABS), secured by projected revenues from the stadium’s operations.
The bond, dubbed Linzi 003, carries a 15.04 percent internal rate of return and matures in July 2040. It is listed under the RFISMS segment of the NSE, involves semi‑annual amortized repayments starting January 2026, and requires a minimum subscription of KSh 1 million.
Notably, interest income and capital gains are exempt from withholding tax, stamp duty, and capital gains tax, making it a tax‑efficient asset for both institutional and retail investors.
Linzi 003 follows the success of Linzi FinCo’s 2024 sukuk issuance, which funded affordable housing, signaling a strategic shift towards infrastructure finance layering private capital into public projects.
The bond achieved 100.19 percent subscription by June 30, 2025, and benefits from an AA(KE)(IR) rating with a stable outlook from GCR Ratings.
Talanta Stadium, currently under construction at Jamhuri Grounds, Ngong Road, is being overseen by the Ministry of Defence, with China Road and Bridge Corporation handling physical works and the Kenya Defence Forces Engineering Brigade providing technical oversight.
The stadium will accommodate 60,000 spectators and is expected to be completed by late 2025 or early 2026, in time for the AFCON 2027 opening and closing ceremonies.
As of mid‑May 2025, the complex was approximately 45 percent built; earlier estimates in April placed it at 37 percent, with KSh 2 billion already disbursed to the contractor.
The stadium’s overarching project cost of KSh 44.7 billion (approximately USD 344.5 million) positions it among the largest public construction efforts in Kenya’s history.
Amid audit queries, the Auditor‑General flagged KSh 1.2 billion of unverified expenditure during early construction phases, noting that payments did not align with tangible progress on-site. The project has also lacked an audit committee, exacerbating transparency concerns.
Despite these governance issues, the government has placed confidence in securitization as a financing model. Plans include establishing an escrow account and liquidity facilities to ensure debt servicing stability.
Trustees selected KCB Bank as the receiving bank, with CPF Financial and KCB Investment Bank managing placement.
Investor scrutiny remains intense. Market watchers highlight the importance of timely completion, revenue generation, and transparent use of funds.
The success of this bond could serve as a template for future infrastructure financing, encouraging private sector participation in national projects.
Failure, however, could spur concerns about contingent liabilities, project delivery, and investor protection.
As Kenya advances toward hosting AFCON 2027 alongside Uganda and Tanzania, the performance of Linzi 003 and the Talanta stadium project will be closely monitored.
Supporters argue that showcasing a modern multi‑purpose stadium will elevate Kenya’s status as a regional sports hub and help catalyze economic activity in hospitality, tourism, and youth development.
Detractors warn that without stronger audit mechanisms and bond market discipline, such high‑profile ventures risk slipping into debt‑driven vanity projects.
The Linzi 003 infrastructure bond thus marks a pivotal test not only for Talanta’s delivery but for Kenya’s broader ambitions to fund major public assets through capital markets innovation rather than solely relying on exchequer allocations.
Written By Ian Maleve
