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Kenya closes green bond of Sh4.3bn with support from UK

The Sh4.3 billion bond, a first for East Africa, is a milestone in Kenya’s transition to a low-carbon economy, and national vision of being a centre of financial excellence in the region/FILE

NAIROBI, Kenya, Oct 4 – Kenya closed its first ever green bond Thursday, with support from the UK. The green bond will raise funds to provide 5,000 university students with environmentally friendly, affordable housing in Nairobi.

The Sh4.3 billion bond, a first for East Africa, is a milestone in Kenya’s transition to a low-carbon economy, and national vision of being a centre of financial excellence in the region.

The UK has been working with the Kenyan government to develop capital markets and attract the private finance needed to deliver on the Big 4 Agenda. Since 2015, UK aid has funded FSD Africa’s work with the Capital Markets Authority and their green bond programme, which created the regulatory framework for green bonds in Kenya.

British High Commissioner to Kenya Jane Marriott said the bond brings together two of the UK and Kenya’s partnership priorities, which include strengthening their economic partnership and working together to respond to climate change.

“This bond will result in Sh4.3 billion supporting a Big 4 Agenda priority, investing in affordable, environmentally friendly housing for 5,000 students in Nairobi. This is great news for young Kenyans continuing their educations, and good news for the planet we share,” she said.

Issued by Acorn Holdings, the bond has been certified as green by the UK Climate Bonds Initiative due to its expected contribution to reducing carbon emissions, after funding and support from UK aid.

The bond is also the first Kenyan corporate bond rated by an international ratings agency.

UK aid funded GuarantCo has also provided a partial guarantee to reduce the risk to investors who buy into the bond. This helped to raise the full amount of the bond and make it a success.

“The UK is mobilising private sector investment to help African nations make the most of their enormous potential. We are leading the way in the listing of green bonds, with over 100 bonds listed on the London Stock Exchange,” UK Secretary of State for International Development Alok Sharma said.

“The growth of the green bond market in East Africa is supporting vital climate resilient infrastructure and helping provide 5,000 students in Kenya with environmentally-friendly, affordable housing. I look forward to building on this success at the UK-Africa Investment Summit next year,” he added.

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