Kenya to Become First Country in Eastern and Central Africa to Float a Green Bond
The National Treasury has announced that it will issue the first green bond during the fiscal year 2018/2019, if successful, this will position Kenya as the first country in in East and Central Africa to issue a green bond.
This is in line with the foundations laid by the Green Bonds Programme Kenya which was launched in March 2017 with the aim of catalysing the market for green bonds.
Furthermore, the Kenya Green Economy Strategy and Implementation Plan (GESIP) 2016–2030 has committed to investing $23.5 billion in Kenya’s green growth path.
“Through the NSE, issuers and investors will have a platform where they can come together and fulfil their green objectives.The Green Bonds Programme Kenya is an innovative tool that will promote economic and climate resiliency for our country,” said Nairobi Securities Exchange chief executive Geoffrey Odundo.
In its annual year report, the Green bonds programme Kenya highlighted the progress and impact of its six events designed to sensitise potential issuers about Green Bonds.
The Programme engaged Lion’s Head Global Partners (LHGP), a Nairobi-based investment bank, to assess the feasibility of establishing the Kenya Pooled Green Bond Fund, a Special Purpose Vehicle (SPV) that will issue Kenyan shilling denominated bonds backed by loans issued by banks towards financing green-certified projects.
The SPV’s objective is to provide a source of financing to medium and small banks, which may not have individual ‘green portfolios’ that are large enough to back a bond issue.
“Green bonds offer easy access to a large and diverse funding pool, providing a source of low-cost and much-needed capital to finance infrastructure projects and set up green funding programmes,” said Capital Markets Authority chief executive Paul Muthaura.
The GBPK is in the process of establishing an Advisory Committee which will be chaired by the Governor of the Central Bank of Kenya. The GBPK, through the Advisory Committee, will lobby for further regulatory incentives to encourage green bond issuance and investment.
The programme, whose patron is the CBK’s governor, is a partner initiative between Kenya Bankers Association, NSE, Climate Bonds Initiative, Financial Sector Deepening Africa and the Dutch Development Bank (FMO). The programme is endorsed by the CBK and the CMA.
Recently, Bank Windhoek Ltd has announced its successful issuance of the first green bond in Southern African market as it that seeks to fund clean projects and assets.