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Capital Markets Authority (CMA) Thursday approved the issuance of Kenya’s first unlisted green bond, which will raise 5 billion shillings ($48.45 million) for student accommodation.
Green bonds are fixed income securities that raise capital for projects in renewable energy, energy efficiency, green transport and waste-water treatment.
The bond, to be issued by a Nairobi-based property developer called Acorn, comes after authorities unveiled new rules in February designed to guide the issuance of green bonds.
The green bond seeks to raise Sh5 billion to finance sustainable and climate-resilient student accommodation and is structured as a restricted public offer for sophisticated investors.
Being a restricted public offer, the issuer will raise the funds from only targeted sophisticated investors participating in the bond will benefit from a 50 per cent guarantee from Guarantco on principle and interest payments.
“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 issuances,” said CMA Chief Executive Mr Paul Muthaura.