Kenya Raises Ksh 4.3 Billion in First Green Bond Issue

Kenya Mortgage Refinance Company Medium Term Note received a 578.6 per cent subscription rate equivalent to Ksh 8.1 billion against Ksh 1.4 billion target.

The Parkroad Estate housing project in Ngara, Nairobi

Kenya’s first green bond has raised Ksh 4.3 billion from a target od Kshs 4.26 billion to finance sustainable and climate-resilient student accommodation. 

The bond was issued by Acorn Project (Two) Limited Liability Partnership following the launch of the Policy Guidance Note on Green Bonds in February 2019. 

The amounts received by Acorn were at a fixed rate of 12.25% and rated B1 Global. 

“The market sentiment for corporate bonds has been very bearish so the fact that we have been able, in the first round, to raise 4.3 billion shillings has exceeded our expectations,” Acorn’s chief executive officer, Edward Kirathe said as quoted by Bloomberg Africa

The issue was looking to raise a minimum of Ksh 2 billion and a maximum of Ksh 5 billion. 

Stanbic Bank Kenya Ltd. was lead arranger.

Acorn Holdings has student residences in Nairobi – Qwetu – with the capacity to house about 1,600 people. Its second project, Palma, is still under construction.

Kenya Bankers Association (KBA) in a Tweet said “East Africa’s first green bond … Issued by Acorn, the milestone puts Kenya on the global green bond map, reinforcing the country’s position as a financial services hub.” 

The Green Bond Programme – Kenya is brought together by the Kenya Bankers Association (KBA), Nairobi Securities Exchange, Climate Bonds Initiative (CBI), Financial Sector Deepening (FSD) Africa and FMO – Dutch Development Bank.

Nigeria in December 2017 became the first country in the continent to tap into the globally popular instrument, raising $30 million (Sh3.03 billion) to fund renewable energy and afforestation projects.

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