Kenya’s first green bond was listed for trading on the Nairobi Securities Exchange on Monday, offering investors the chance to put money into an environmentally-friendly fixed income security for the first time in the bourse’s 65 year history.
Green bonds raise capital for projects in renewable energy, energy efficiency, green transport and waste-water treatment.
The bond, worth 4.3 billion shillings ($42.5 million), was issued by Nairobi-based property developer Acorn Holdings last October to build student accommodation.
“Our capital markets, our investors and indeed our government have started to take climate change seriously ,” said Kiprono Kittony, a member of the board of the Nairobi Securities Exchange (NSE)
“They will be listing the green bond also on the London Stock Exchange next week which is a first also to have a Kenyan shilling bond listed in the United Kingdom.”
The green bond from Acorn followed new regulations by the Kenyan government last year that exempt investors from paying withholding taxes on their interest earnings from such bonds.
Kenya’s financial sector has a joint green finance initiative, bringing together banks and even regulators, which encourages issuance of new products like green bonds to help fight the impact of climate change.
Patrick Njoroge, the governor of the central bank, said the initiative was important because developing countries like Kenya were being disproportionately hit by global warming, despite being some of the lowest polluters on the planet.
“Eventually, all finance will be green,” he told a launch ceremony for the Acorn bond at the NSE.
The government was considering issuing such bonds, said Julius Muia, the principal secretary at the ministry of finance, without giving more details.
“We are going to be very innovative in our in our revenue-raising initiatives,” Muia told Reuters.
Acorn’s bond was structured as a “restricted public offer”, targeting sophisticated investors who received a 50% guarantee from credit guarantees provider Guarantco on both their investments and the interest.
Global green bond issuance was expected to be $140-$180 billion last year according to HSBC, compared with $149.2 billion in 2018.