The Acorn 5 year medium term green note arranged by Stanbic Bank closes today, 27 September 2019.
Stanbic is the issuing and paying agent thus will confirm that funds will not be used for more than 65 percent of the project costs with Acorn contributing the other 35 percent.
The bond has 12.25 percent interest and is guaranteed up to 50 percent of principal and interest by GuarantCo amounting to $30 million.
GuarantCo sponsors include governments of the UK, Netherlands, Switzerland, Australia, and Sweden and FMO, the Dutch Development bank.
Capital Markets Authority approved the issuance of the first green bond by Acorn to finance sustainable and climate-resilient student accommodation on August 16.
Moreover, allotment will be done on 30 September 2019 with the minimum level subscription set at 40 percent for it to be deemed a success with the bond being limited to institutional (sophisticated) investors only.
Surprisingly, the bond carries a rating by Moody’s that is higher than the Kenyan government’s sovereign rating.
Parliament’s nod
The National Assembly supported a bill proposing withholding tax exemption for green bonds thus likely to encourage investment in green bonds.
According to Nuru Mugambi, KBA Director, and Sustainable Finance Strategist, should the law be passed it will bring in more than KSh500 billion worth of private sector investment creating more than 500,000 jobs.
Furthermore, a Green Bonds Program- found out that manufacturing, transport, and agriculture sectors have combined green investment and financing opportunities of Ksh87Bn over the next five to ten years.
