Capital Markets Authority has partnered with Nairobi Securities Exchange and Kenya Pension Funds Investment Consortium
The deal will see the partners promote the financing of infrastructure projects through the capital markets
The Retirement Benefits Authority recently introduced infrastructure as a distinct investment category under the pension fund investment regulations
Capital Markets Authority (CMA) has signed a Memorandum of Understanding with two key partners to support the financing and development of infrastructure projects through the capital markets. CMA, NSE partner to promote the financing of infrastructure projects through capital markets. CMA said it has enlisted the Kenya Pension Funds Investment Consortium (KEPFIC) and the Nairobi Securities Exchange (NSE) for the initiative, in which they will target pension schemes to invest in the projects as provided for in the investments guidelines.
The deal is expected to lead to the growth and deepening of the country’s capital markets. Infrastructure as an investment
It comes at a time when the Retirement Benefits Authority has introduced infrastructure as a distinct investment category under the pension fund investment regulations.
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The company told TUKO.co.ke that the partners will be seeking avenues to deploy pension funds’ investments into infrastructure projects using available capital markets products such as Green Bonds, Asset-Backed Securities (ABS) and Real Estate Investment Trusts (REITs).
The new investment allows pension funds to directly invest up to 10% of their portfolio in the asset class, which CMA says could potentially unlock approximately KSh 140 billion for infrastructure investments. “The partnership will therefore cement the capital markets contribution to the Sustainable Development Goal Nine, by leveraging capital markets to build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation, while providing pension funds with a significant return on their investments,” CMA CEO Wyckliffe Shamiah said. According to the Authority, infrastructure investments are capital-intensive, meaning the pooling of long-term capital is necessary.
CMA added that the deal will not only leverage economies of scale but also help in financing big-ticket infrastructural projects.
The MoU is also expected to provide an avenue for enhancing the liquidity of KEPFIC investments through the capital markets.Commenting on the same, NSE Chief Executive, Geoffrey Odundo said the collaboration falls in line with its strategy. "This deal outlines the direction NSE is taking in enhancing pension fund activity through forming strategic partnerships as well as reaffirming our commitment to increasing liquidity in […]
