Kisumu In a Bid to Get Infrastructure Bond Issue Approval

Kisumu County is among four counties that are in the process of getting an approval from the Treasury to raise funds through infrastructure bond to help improve on their development projects.

Mr. Luke Ombara, the Capital Markets Authority director for regulatory policy and strategy, said Kisumu, Makueni, Laikipia and Bungoma have started working on getting clearance to raise money from investors for development projects.

The Capital Markets Authority (CMA) said it was in talks with the Treasury to facilitate counties, which meet the stringent borrowing conditions, to raise some of the KShs 1.1 trillion project funding projected in the County Integrated Development Plan for 2018-2023.

“Before Laikipia, there was Makueni, Bungoma and Kisumu; all of which have been able to do a credit rating which is a step to show they are really progressing towards listing,” said Mr Ombara.

The Treasury, in early March, published guidelines on borrowing by devolved units that require the counties to be able to raise at least 15 percent of project funds from their internally generated resources.

“There’s been a good level of interest for counties to raise capital or market-based finance, particularly based on their equitable transfer which is largely used in addressing recurrent expenditure,”Mr Ombara said.

“But they would also want to get into projects and you need long-term money to fund such long-term projects such as infrastructure, energy and building of resorts.”

The Constitution allows counties to borrow from the capital markets and foreign sources with clearance from the National Treasury.

However, the Treasury has been a bit reluctant to guarantee counties to raise funds from investors through the capital markets since 2013 when they started operations.