KCB Group Secures $150 Million Loan, Raises Stake in Rwandan Subsidiary

KCB Group Secures $150 Million Loan From IFC, Raises Stake in Rwandan Subsidiary (News Central TV)

The International Finance Corporation (IFC) has granted KCB Group, a holding company for financial services, a loan of US$150 million to support its lending to green businesses.

According to IFC filings on the new loan line, the facility will have a seven-year maturity with a two-year grace period and entail the institution giving KCB back office help on green financing strategy.

“The proposed project consists of a US$150 million senior unsecured loan to KCB Bank Kenya Limited. The proceeds will support the growth of the bank’s climate finance portfolio…the project builds on prior and new Climate Advisory Services (AS) engagements, which serve as an anchor for the bank’s strategic commitment to deepen its participation in this under-served segment,” said the IFC.

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KCB Group CEO Joshua Oigara

“The scope of IFC’s Climate AS will include input to KCB’s climate finance strategy, knowledge, and capacity building, and climate risk assessment and reporting.”

Existing KCB Kenya loans with the IFC include a seven-year, $75 million loan issued in 2018 at Libor plus 5.3 percent and a 10-year $150 million loan granted in 2020 at Libor plus 5.15 percent annually. However, given that the Libor benchmark has been phased out, these older loans will need to be repriced.

KCB raises stake in Rwandan subsidiary

Following the merger of KCB Bank Rwanda and Banque Populaire du Rwanda (BPR) in May, KCB Group increased its interest in its Rwandan subsidiary by an extra 10.8% to 87.5%, according to a report.

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In a deal that was completed last year, the Kenyan banking behemoth acquired a 62 percent share from London-based Atlas Mara Limited and a further 14 percent from private equity company Arise. It then set its sights on capturing the remaining 24 percent held by minority owners.

The National Bank of Rwanda (BNR), Rwanda’s banking watchdog, gave KCB regulatory approval in March to merge the operations there, resulting in a larger stake thanks to the infusion of KCB Rwanda’s assets into the combined entity.

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