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Portfolio/CELTEL Kenya

KES 725million partial credit guarantee to credit enhance a local bond issue as part of a larger financing package for the second mobile telecommunications provider in Kenya.

Celtel Kenya


Date of Transaction

December 2005



Financing Partners


GuarantCo Guarantee

KES 735 million (USD 12 million)



Total Transaction Amount


GuarantCo Benefits

As part of its initiative to maximise local currency financing, Celtel Kenya sought to raise Kenyan Shilling debt from the local capital market. However, in order to place debt in the local capital market, Celtel Kenya needed to obtain credit enhancement from an AAA-rated institution. GuarantCo’s involvement enabled FMO to arrange and underwrite the required credit enhancement for the debt issuance.

The facility provided a major boost to the Kenyan capital market due to the demonstration effect of a private sector non-financial institution’s successful bond listing.

Development Benefits

Celtel Kenya needed to restructure its balance sheet by exchanging costly foreign currency shareholder loans with local currency debt. This allowed the company to run a more capital-efficient and competitive business and expand its network. This helped to reduce tariffs, thus making mobile services affordable to a greater proportion of the population.


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