CBK Records Strong Demand in August Infrastructure Bonds Reopening

CBK (Central Bank of Kenya) latest Infrastructure Bond (IFB) reopenings attracted KSh 460.4 billion in bids against KSh 150 billion on offer, resulting in oversubscription.

The CBK accepted KSh 312.0 billion, equivalent to 208% of the amount initially offered and 67.8% of total bids received.

Accepted Amounts & Yields

IFB 1: KSh112.6Billion — 12.1960%

IFB 2: KSh 105.5Billion — 12.6877%

IFB 3: KES 93.9Billion — 13.0520%

The strong demand allowed CBK to raise significantly more than the original target while pricing the three instruments at yields ranging from 12.20% to 13.05%.

After accounting for redemptions, the transaction results in approximately KSh 193.9 billion in net new borrowing.

CBK offer to investors

The re-opened 16-year infrastructure bond, which matures on October 8th 2035 had a coupon rate of 11.75%.

The second re-opened infrastructure bond, which was first sold in 2021, matures on 21st March 2039 and has a coupon rate of 12.667%.

The third re-opened infrastructure bond, which has a coupon rate of 12.737% and matures on 18th August 2042.

2026/27 Budget Allocations for Infrastructure Projects

The 2026/27 Budget has a huge allocation for several infrastructure projects that the Government plans to execute.

On the cards is a budget allocated KSh 220.4 billion to Roads, which includes KSh 118.1 billion for road maintenance, KSh 58 billion for rehabilitation works, and KSh 44.3 billion for construction of new roads and bridges.

Treasury also plans to spend KSh 38.4 billion for extension of the Naivasha-Kisumu-Malaba rail with KSh 20.8 billion set aside for SGR extension to Malaba. KSh 616m is for purchase of 500 SGR flat wagons plus 20 passenger coaches and KSh 2.76 billion for locomotive wheel sets.

The Nairobi Railway City project will cost KSh 436 million while KSh 726m is for rehabilitation of the old metre-gauge railway from Longonot to Malaba, KSh 1.39 billion for Nairobi-Nanyuki line and Kisumu-Butere line.

The Kenya Government also plans to spend KSh 30.9 billion for expansion of electricity through rural electrification, national grid development and alternative energy technologies.

The 2026/27 Budget has also set aside KSh 8.6 billion for Kenya Digital Economy acceleration project, fibre optic expansion and Konza smart city.