Kenya’s weather experts have now put a number on what many had treated as speculation. The Kenya Meteorological Department estimates an 81 percent probability of a very strong El Niño this year, bringing above-normal rainfall during the October to December short rains, and a 97 percent chance that the event extends into early 2027. For finance leaders, that is not just a forecast but a planning assumption.
A telecommunications network is a large consumer of electricity, with thousands of base stations operating around the clock. When storms bring down power lines, sites switch to batteries and then diesel generators – the most expensive electricity an operator buys.
Those generators must be refuelled by trucks travelling on roads damaged by the same rain.
Extended cloud cover creates another challenge. At Safaricom, we have converted 2,002 sites to solar power, with green energy now powering 35 percent of our network. Heavy cloud reduces solar output when the national grid is least reliable, forcing deeper battery cycles and accelerating replacement schedules.
The story does not end with higher costs. Full dams can increase hydropower generation and moderate electricity prices. Stronger harvests raise rural incomes, increasing economic activity and digital transactions. The risks lie in local infrastructure reliability; the opportunities lie in stronger national supply and demand. The objective is to model the forecast.
Both risks and opportunities eventually appear in the accounts as higher fuel bills, more expensive logistics, earlier maintenance cycles and insurance costs. By then, the cheapest opportunity to respond has passed.
This was the message I shared with finance leaders at the third annual CFO East Africa Sustainability Summit. The CFO’s responsibility today goes beyond protecting shareholder value and allocating capital. It includes recognising climate risk while it is still weather, rather than waiting until it becomes an accounting entry.
Climate-related investments should compete for capital on the same merits as any acquisition or major expansion. Does the investment reduce material risk? Does it lower costs or improve efficiency? Does it strengthen resilience to future shocks? Where the answer is yes, it belongs in the capital allocation process.
Capital markets have already moved in this direction. Late last year, Safaricom raised Sh20 billion through green notes to finance eligible environmental projects. The issue was oversubscribed by 175.7 percent, showing that investors increasingly recognise environmental resilience as a financial proposition.
Ultimately, this is a balance sheet issue. Climate exposure represents future costs, while investment in people, communities and sound governance strengthens reputation, customer loyalty and talent – assets that may not appear explicitly on the balance sheet but influence enterprise value.
October is roughly 90 days away. The forecast is public. The financial consequences of this rainy season will be determined not when the first storms arrive, but by decisions being made today.
Caroline Wambugu is the Head of Group Finance Controls, Performance and Investor relations, Safaricom PLC