Kenya will take up a fifth sovereign bond (Eurobond) targeting KSh 105.6 billion in the next fiscal year, with the National Treasury indicating plans to float its first green bond.
The government has in the last seven years already issued four Eurobonds, netting a total of KSh 880 billion ($7.85 billion), the latest of which was the $1 billion (KSh112 billion) raised in June this year.
The Treasury said in the draft 2022 Budget Policy Statement that it intends to tap into green financing in the upcoming fiscal year now that the framework for such issuances is in place.
It is targeting a KSh 105.6 billion sovereign bond as part of the net external budget deficit financing amounting to Sh363 billion in the 2022/2023 fiscal year. Net domestic borrowing is Ksh 483.1 billion (3.4 per cent of GDP).
Treasury plans to tap into green financing by issuing the first Sovereign Green Bond to finance green and climate-related projects and programmes.
Over the last three years, the Government in collaboration with key stakeholders locally and internationally has been developing the green bonds market with a view to mobilizing adequate resources to support the implementation of climate and environmental actions in Kenya.
The Green Bonds Regulatory Framework, which includes Capital Markets Authority’s Policy Guidance Note for Issuance of Green Bonds, set the foundation for the development of a Green Bond Market for financing green projects and programmes in Kenya.
In addition, the National Treasury has developed a Kenya Sovereign Green Bond Framework. In order to increase mobilization to finance climate from the Green Climate Fund (GCF), the National Treasury in its role as the National Designated Authority will spearhead an accelerated development of bankable funding proposals and accreditation of entities.