Laikipia County is on course to making history with the proposed sale of a Sh5 billion infrastructure bond to bridge a financing deficit.
If successful, the bond which is to be sold through the National Treasury, will make Laikipia the first devolved unit to raise money from the capital markets.
The plan comes at a time when the Controller of Budget’s implementation report for the 2017-2018 financial year, indicates that counties raised Sh32.5 billion from local sources against a target of Sh49 billion, leaving a deficit of nearly Sh17 billion.
Ndiritu Muriithi, the Laikipia governor, Wednesday said the county was working with the National Treasury and the Central Bank of Kenya on the prospectus – the document that contains details of the bond including pricing, coupon and the tenor.
“Our borrowing will be sanctioned by Intergovernmental Budget and Economic Council and the National Treasury. This class of securities will ensure that the bond is attractive to investors,” Mr Ndiritu said.
Laikipia is seeking funds to finance key infrastructure projects, including the roads network and building health facilities.
Infrastructure bonds are common with the national government, which On Monday issued a Sh50 billion instrument, the largest such offering since Kenya launched the first of such bonds in 2009.
Mr Ndiritu said his administration had managed to increase revenue collection from Sh463 million in the 2016-2017 fiscal year to Sh608 million the financial year ended June 2018.
His deputy, John Mwaniki, who was once the head of the Bond Market Association, said the county was waiting for a CBK advisory on the coupon rate and the minimum unit amount investors can buy.
possunt quia posse videntur