Kenya has approved its first ever issuance of green bond, which will raise five billion shillings ($48.45 million) for students’ accommodation, the capital markets regulator, CMA, said on Thursday.
The CMA said in Nairobi that the bond, to be issued by a Nairobi-based property developer, Acorn, came after the authorities unveiled new rules in February, designed to guide the issuance of green bonds.
“The issuance is a critical step in advancing the development of an effective ecosystem to support the establishment of green capital markets in Kenya,” the CMA said in a statement.
Green bonds are fixed income securities that raise capital for projects in renewable energy, energy efficiency, green transport and waste-water treatment.
CMA said Acorn’s issue, which would not be listed, would finance the construction of “sustainable and climate-resilient students’ hostels.
CMA added that the bond would be structured as “restricted public offer,” meaning the issuers will target sophisticated investors who will get a 50 per cent guarantee from credit guarantee provider, Guarantco, on both their investments and the interest.
Acorn was not immediately available for comment.
In January, the Hongkong and Shanghai Banking Corporation (HSBC) said global green bond issuance is seen at $140-$180 billion this year, from $149.2 billion in 2018.