- Acorn is the first issuer of a certified green bond in East & Central Africa.
Kenya’s first Ksh 4.3 billion green bond started trading Monday at the Nairobi Securities Exchange (NSE).
The 5-year bond, issued by real-estate developer Acorn, will be listed in three tranches with the newly listed first tranche floated at KSh786 million.
UK Secretary of State for International Development Alok Sharma described the listing that is supported by the UKaid as a “landmark for Kenya.”
“I recognize the role that capital markets can play in creating jobs and driving forward the economy and that’s what this transaction is all about,” he said during the listing.
NSE chief executive Geoffery Odundo said that the bond, which is a secondary listing, would act as a catalyst for the bonds market, which had slowed down in the recent past.
“We think the green bond is going to create a new interest in the market,” said Odundo.
The green bond will be tax-free following changes in the Finance Bill 2019, joining infrastructure bonds which are also tax-exempt.
Green bond refers to a bond issued to finance sustainable and climate-resilient student accommodation.
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.
According to Samuel Kimani, the Chairman of the Nairobi Securities Exchange, the project meets the affordable housing demand in the country.
“The number of students going to university has grown but the scholars’ accommodation does not meet the need and we will also support the development of green bonds and we will get more issuers,” said Kimani.
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.