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Kenya’s first green bond has raised $41.45 million for the development of environmentally-friendly student accommodation.

Reuters reported that the bond was issued by Nairobi-based property developer Acorn Holdings after new rules were unveiled in February to guide the issuance of green bonds.

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Arranging the deal was Stanbic Bank, who noted that the bond was priced at an interest rate of 12.25% and rated B1 Global, a notch above the Kenyan government’s rating of B2, Reuters reported.

Nuru Mugambi, director at the Kenya Bankers Association, said that green bonds will help protect Kenya from the impact of extreme weather on the agriculture sector, which contributes about one-third of the annual GDP: “With the landmark legislation that zero-rates taxes on green bonds, we expect to see more issuance coming to market.”

Programme Objectives 

The Green Bond Programme – Kenya will focus on the following objectives to support the issuance of the first Kenyan green bond and the development of a domestic green bond market:​

  • Researching the potential of green bond issuance in Kenya
  • Developing a pipeline of green investments and engaging with local and international investors
  • Supporting demonstration green bond issuance from leading banks and corporates
  • Promoting green Islamic finance
  • Developing a pool of Kenya-based licensed verifiers
  • Development of a cooperative fixed income fundraising facility that would allow smaller banks and corporates to also take advantage of wholesale debt capital markets
  • Leveraging the Kenya experience to catalyse similar programmes across East Africa Community

Read more about the Green Bonds Programme here