Laikipia county government is set to float a Sh. 5 billion infrastructure bond in the Kenyan market to finance road construction and upgrading of towns.
Governor Ndiritu Mureithi said that the long term bond expected to be floated at the Nairobi Securities Exchange in the next six months would finance major infrastructure projects of his government.
Speaking on Wednesday during a media briefing session at Nanyuki County hall, Governor Mureithi added that his administration had commenced proper financial management reporting practices so as to meet treasury’s threshold of floating a bond.
This will make Laikipia the first county to borrow money for development directly from the public if approved by treasury.
“We are seeking to boost investor confidence through proper financial management systems so that they can confidently lend us money to carry out the development projects we desire,” Governor Mureithi said.
The county boss further said that his government was working on recommendations of the Auditor General on the 2016/2017 financial year that among other things called for sealing of loopholes in revenue collection and streamlining of procurement practices.
As a result, the governor said his administration had introduced a raft of measures in revenue collection that had seen the total sum of revenue collected rise to Sh. 608 million currently from Sh. 463 million in the 2016/2017 financial year.
He also added that his government had embraced e-procurement practices and introduced “First in First Out” (FIFO) payment systems where all payments are made in less than 42 days.
Budget absorption for development projects had also shot to 91per cent currently up from 63 per cent in the 2016/2017 financial year.
The Executive in charge of Finance, Murungi Ndai said that county was in constant touch with the national treasury that would determine the coupon rate that would give the interest rate charged.
Infrastructure bonds are normally issued to fund the infrastructure projects such as road construction, water supply improvement and power generation projects by governments and corporates. Tax incentives are normally given to woo investors to buy the bonds.
The Deputy Governor, John Mwaniki revealed that Laikipia was in talks with private investors to fund the Bulk Water project that is to be undertaken by Nanyuki Water and Sewerage Company that would boost water provision in the county under Public Private Partnership initiative.
By Martin Munyi