This archive report was first published on 4 October 2019.
On Thursday, Kenya made history by closing its first ever green bond, marking a significant milestone in the country's transition to a low-carbon economy. The bond, which raised Sh4.3 billion, was supported by the UK and will provide 5,000 university students with environmentally friendly, affordable housing in Nairobi.
The green bond is a first for East Africa and a major step towards achieving Kenya's national vision of being a centre of financial excellence in the region. The UK has been instrumental in supporting Kenya's capital markets and attracting private finance to deliver on the Big 4 Agenda.
Since 2015, the UK 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. This framework has enabled Kenya to issue its first green bond, a testament to the country's commitment to a low-carbon economy.
British High Commissioner to Kenya Jane Marriott hailed the bond as a success, saying it brings together two of the UK and Kenya's partnership priorities: 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.
The bond, issued by Acorn Holdings, has been certified as green by the UK Climate Bonds Initiative due to its expected contribution to reducing carbon emissions. It is also the first Kenyan corporate bond rated by an international ratings agency.
UK aid funded GuarantCo has provided a partial guarantee to reduce the risk to investors who buy into the bond, helping 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.
