Kenya Credit Enhancement Facility

Kenya Credit Enhancement Facility is a proposed non-bank financial institution that will be set up in Kenya to facilitate the issuance of irrevocable and unconditional credit guarantees to credit enhance long-term local currency debt backed by infrastructure related projects. This credit enhancement is expected to catalyse investment by institutional investors into issuances other than sovereign. The goal is to provide a 100% guarantee, thereby transferring credit risk from the sponsor to KCEF. Given the high target rating of KCEF, the wrap would enable domestic institutional investors to invest in the bonds issued by sponsors. Over time, it is expected, as has happened elsewhere, that sponsors will make repeat issuances without credit guarantees.