Parliament has approved a request by Laikipia County to borrow Sh1.16 billion through a domestic infrastructure bond at the stock market.
On Thursday evening, the Senate voted to approve a request by the Treasury Cabinet Secretary to guarantee Laikipia County’s borrowing of Sh1.16 billion for the infrastructure bond.
The Senate and the Cabinet approved the guarantee for the borrowing in line with Article 2021 of the Constitution and section 58 of the Public Finance Management Act.
According to Article 212 of the Constitution, a county government may borrow only if the national government guarantees the loan and the county government’s assembly approves it.
“The Senate adopts the report of the standing committee on Finance and Budget concerning the approval for the national government to guarantee Laikipia county government to borrow by issuance of Sh1.16 billion infrastructure bond…and pursuant to Section 58 of the Public Finance Management Act approves the request by the Cabinet Secretary for the National Treasury to guarantee the county government of Laikipia to borrow Sh1.16 billion for infrastructure bond,” the committee said in the report.
The House’s approval follows the Cabinet’s decision last month to approve the request, making the county the first since devolution to float a bond to raise funds on the Nairobi Securities Exchange.
“The objective of the infrastructure bond is to finance implementation of projects, including the provision of water for agricultural production, and improvement of the business environment by upgrading markets and town infrastructure; which will provide additional jobs to the residents of Laikipia and improve their household incomes and livelihoods,” Ukur Yatani, the Treasury Secretary said in a letter to the Senate.
The Laikipia government has lined up about 16 projects for financing.
According to Governor Ndiritu Muriithi, the proceeds of the seven-year bond will be invested in water and sewerage systems, paving roads, walkways, and cyclist paths, as well as improving street lighting and enforcing building zones.
“The targeted projects will help spur economic activity, helping it enhance revenue collection through single business permits, parking fees, land rates as well as water and sewerage connection charges,” he said.
Among the urban areas slated for development include Nyahururu, Nanyuki, Kinamba, Ol Jabet, Wiyumiririe, Doldol, Karuga, Naibor, Kalalu, Mouwarak and Pesi.
