Capital Markets Authority Approves Kenya’s First Green Bond

The Capital Markets Authority (CMA) has approved the issuance of Kenya’s first unlisted green bond, to Acorn Project (Two) Limited Liability Partnership.

The green bond seeks to raise KSh5 billion to finance sustainable and climate-resilient student accommodation and is structured as a restricted public offer for sophisticated investors. Issuers will target sophisticated investors who will get a 50% guarantee from credit guarantees provider Guarantco on both their investments and the interest.

“The issuance is a critical step in advancing the development of an effective ecosystem to support the establishment of green capital markets in Kenya in line with the Marrakech Pledge 2016, now that the necessary legal instruments are in place to facilitate such issuance,” CMA chief executive Paul Muthaura said.

This follows the launch of the Policy Guidance Note on Green Bonds in February 2019.

“The approval of the amendments to our listing rules to facilitate issuance of green bonds will enable the NSE offer local and international issuers additional source of green financing, improve investor diversification as well as enhance issuer reputation thus leading to growth in our market,” NSE chief executive Geoffrey Odundo said during the launch of the amended rules.

Mr. Muthaura added that the Authority will continue engaging with potential issuers in order to create a pipeline of green bond issuers to facilitate effective matching of demand and supply of green-centric capital and climate-resilient investing opportunities.

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.