East African Breweries Plc (EABL) is aligning its reporting systems with the International Financial Reporting Standards for Sustainability, IFRS S1 and S2, as it positions itself to issue a sustainability-linked debt instrument in the medium to long term.
A sustainability-linked bond is a form of borrowing where funding is tied to clearly defined environmental or climate-friendly targets, reflecting the growing push to limit the impact of climate change. IFRS S1 and S2, developed by the International Sustainability Standards Board, require firms to disclose material sustainability risks that could affect their business. IFRS S1 focuses on environmental, social and governance disclosures, while IFRS S2 deals specifically with climate-related risks and their operational implications.
EABL says it considered launching a sustainability-linked bond when it returned to the market in October 2025 but ultimately opted for a conventional issue, citing the complexity and time required to structure such a facility. In that issuance, the brewer raised Sh16.76 billion through a five-year corporate bond priced at 11.8 percent, attracting bids worth 154 percent of the offer.
Chief Finance Officer and Head of Strategy Risper Genga Ohaga said that while issuing a sustainability-linked facility is conceptually straightforward, meeting the required performance targets and setting up the necessary systems is far more demanding, particularly in manufacturing. She noted that timing was critical, and the additional preparation would have delayed the transaction.
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Once IFRS S1 and S2 are fully embedded from a manufacturing perspective, Ms Ohaga said, issuing a sustainability-linked bond would be much easier. She added that the company is already undertaking a gap analysis to assess how well its operations align with the new standards, including disclosures around greenhouse gas emissions.
EABL has been strengthening its sustainability credentials in recent years, including commissioning three biomass energy plants in 2022, two at Kenya Breweries Ltd and one at Uganda Breweries Ltd, to reduce its carbon footprint.
The brewer is eyeing a future sustainability-linked bond as governance structures, controls and infrastructure mature. For now, it chose certainty over complexity in its latest fundraising, prioritising speed over a more elaborate structure.
If it proceeds, EABL would join a small group of Kenyan firms that have already tapped the market with sustainability-linked bonds. Safaricom Plc raised Sh20 billion in November 2025 through a five-year sustainability-linked note priced at 10.4 percent after attracting bids worth Sh41.6 billion. Earlier, in 2019, Acorn Holdings issued the country’s first sustainability-linked bond, raising Sh5.7 billion at an annual rate of 12.25 percent.
