Parliament has approved a request by Laikipia County to borrow Sh1.16 billion through a domestic infrastructure bond at the stock market.
The Senate on Thursday evening voted to approve a request by the Treasury Cabinet Secretary to guarantee Laikipia County to borrow Sh1.16 billion for the infrastructure bond.
The Senate and the Cabinet approved the guarantee for the borrowing in line with Article 2021 of the Constitution and section 58 of the Public Finance Management Act.
Article 212 of the Constitution stipulates that a county government may borrow only if the national government guarantees the loan and with the approval of the county government’s assembly.
“The Senate adopts the report of the standing committee on Finance and Budget concerning the approval for the national government to guarantee Laikipia county government to borrow by issuance of Sh1.16 billion infrastructure bond…and pursuant to Section 58 of the Public Finance Management Act approves the request by the Cabinet Secretary for the National Treasury to guarantee the county government of Laikipia to borrow Sh1.16 billion for infrastructure bond,” the committee said in the report.
The House approval follows last month’s decision by the Cabinet to clear the request, making the county the first since the advent of devolution to float a bond to raise money in the Nairobi Securities Exchange
“The objective of the infrastructure bond is to finance implementation of projects, including the provision of water for agricultural production, and improvement of the business environment by upgrading markets and town infrastructure; which will provide additional jobs to the residents of Laikipia and improve their household incomes and livelihoods,” Ukur Yatani, the Treasury Secretary said in a letter to the Senate.
The Laikipia government has lined up about 16 projects for financing.
The proceeds from the seven-year bond will be invested in water and sewerage systems, paving roads, walkways and cyclist paths and enhancing street lighting and enforced building zones, said Governor Ndiritu Muriithi.
The urban centres earmarked for development include Nyahururu, Nanyuki, Kinamba, Ol Jabet, Wiyumiririe, Doldol, Karuga, Naibor, Kalalu, Mouwarak and Pesi.