Kenya unclear on dates to debut sovereign green bond

The Kenyan government appears to be unsure on the timelines with its planned debut of a sovereign green bond to finance its green projects in line with the country’s green economy and climate change development agenda.

National Treasury Cabinet Secretary Ukur Yatani in a virtual meeting without giving timelines and dates of the anticipated launch, said that those plans would take place in the near future five months after the announcement was first made public by the Central bank of Kenya’s Governor Patrick Njoroge.

“Kenya will soon be launching its debut Sovereign Green Bond to finance green projects across the country in line with the country’s green economy and climate change development agenda,” Yatani said.

Green finance is financial investments flowing into sustainable development projects and initiatives, environmental products, and policies that encourage the development of a more sustainable economy.

Through green finance, Kenya will seek to respond to the pressing realities that environmental degradation in general, and climate change in particular, is presenting to the country’s economic growth and development and the socio-economic wellbeing of the 70 percent of its population that directly depend on natural resources.

Proceeds from green bonds are used to finance projects in renewable energy, energy efficiency, green transport, and wastewater treatment sectors.

The government initially aimed to raise $50 million (Sh5.04 billion) through the green financing facility.

The 10-Year Financing Locally Led Climate Action or FLLoCA programme under The National Treasury & Planning, seeks to mobilize USD 1.05 billion to support the update of Nationally Determined Contributions (NDC). In this regard, over 50 per cent of all counties in Kenya have established

County Climate Change Funds (CCCFs) and dedicated at least 2 per cent of their development budgets to climate adaptation actions and to building local climate resilience infrastructure.

The country recently concluded The Landscape of Climate Finance in Kenya: On the Road to Implementing Kenya’s NDC, in March this year which successfully tracked and placed Kenya’s green-related investments in FY 2017/18 at Sh 243.3 billion or USD 2.4 billion.

Of this amount public resources from domestic and international providers accounted for Sh 144.3 billion or 59.4 per cent of green investments while the private sector accounted for the balance.

To date, Kenya has attracted an estimated USD4.6 billion for green projects and programmes in various sectors, with the green energy sector accounting for 40 per cent of those flows and related projects.