Capital Markets Authority (CMA) has approved the issuance of Kenya’s first green bond. It follows the launch of the Policy Guidance Note on Green Bonds in February in 2019.
The first Green Bond will be issued by Acorn Project (Two) Limited. Acorn Project LLP seeks to raise Ksh5 billion to finance sustainable and climate-resilient student accommodation. The green bond is structured as a restricted public offer for sophisticated investors.
A restricted public offer implies that the issuer will raise funds from only targeted investors. The investors participating in the bond will benefit from a 50 per cent guarantee from Guarantco on principle and interest payments.
This is a big milestone for CMA, which is among the signatories of the Marrakech Pledge 2016. CMA chief executive Mr Paul Muthaura said,” The issuance is a critical step in advancing the development of an effective ecosystem to support the establishment of green capital markets in Kenya.”
CMA is still engaging with potential issuers to strengthen the green bond market by matching demand and supply of green-centric capital and climate-resilient investing opportunities.