London Stock Exchange To Attract Investment For Kenya’s Energy Industry

By Peter Pedroncelli Published: May 29, 2017, 5:44 am
Kenyan government signs memorandum of understanding with London Stock Exchange. Photo - LSEKenyan government signs memorandum of understanding with London Stock Exchange. Photo - LSE

The London Stock Exchange has committed to raising capital for Kenya’s energy industry, with the first ever memorandum of understanding signed between the London bourse and the East African government.

The agreement was signed by Charles Keter, Kenyan cabinet secretary for energy and petroleum, and Nikhil Rathi, chief executive officer, London Stock Exchange plc.

The memorandum sets out the commitment from both sides regarding the raising of funds to benefit the country’s energy industry, through public market equity and debt listings, according to AllAfrica.

Part of the agreement will see both parties assemble key stakeholders to establish an effective dual-listing framework for equity listings in London and Nairobi.

The London Stock Exchange has a history of supporting African financial markets, and recently renewed their capital markets agreement with the Nigerian Stock Exchange, which was originally penned in 2014 to support African companies seeking dual listings in London and Lagos.

London Stock Exchange market infrastructure technology is deployed in more than 12 African markets, including Nairobi Securities Exchange, Botswana Stock Exchange, Casablanca Stock Exchange and Johannesburg Stock Exchange.

As a result, there are 106 African companies listed or trading on the London Stock Exchange, which is more than on any other international stock exchange, according to LSEG.

London Stock Exchange to boost Kenyan energy infrastructure

Rathi, the London Stock Exchange plc CEO, commented on the important agreement as part of a wider effort to support access to capital across the globe.

“The Kenyan energy industry holds enormous potential for growth, and we are honoured to sign this agreement today with the Kenyan government,” Rathi said, according to Proshare.

“Part of London Stock Exchange Group’s mission is to boost access to growth capital for companies from across the world. With 106 African companies listed on our markets, we are uniquely placed to be working in partnership with the Kenyan government towards this aim,” he added.

Kenyan ministry of energy and petroleum cabinet secretary Keter revealed the benefits that the agreement, and the subsequent investment, would have for the country’s energy infrastructure.

“With our growing energy demand and the significant progress that we continue to make in our petroleum exploration efforts, we recognize that as a country, we need to develop world class energy infrastructure,” Keter said, according to KenyaHigh.

“Our partnership with London Stock Exchange group is driven by our realization that energy infrastructure projects are very capital intensive and mobilization of capital is critical to providing clean, sustainable, affordable, competitive and secure energy required for Kenya to improve its industrial performance.”

After the discovery of more than 760 million barrels of recoverable oil reserves in south Turkana, the country is in search of investors that will assist with the construction of a crude oil pipeline from oilfields in Turkana to a proposed port in Lamu that will cost in the region of $2.1 billion, according to TheStar.

The London Stock Exchange agreement will assist the Kenyan energy industry to find the investors they require to make the project a reality and further boost the economy.

“We believe that this partnership will be able to help us mobilize the capital required to accelerate the pace of energy infrastructure development in Kenya which will in turn drive our country to achieve its full industrial potential,” added Keter.

“As we continue to invest in our energy infrastructure, we urge companies to come and partner with us by investing in Kenya,” he concluded.

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