Kenya has gotten its very first green bond. Stanbic Bank in Kenya, who arranged the deal, announced the arrangement. It has raised $41.45 million (4.3 billion Kenyan shillings), according to the bank. The bond will be used to build climate-resilient student accommodation in Nairobi. Nairobi-based property developer Acorn Holdings issued the bond. In February, new rules were issued in Kenya to guide the green bond issuance. Bloomberg says: The notes are certified under the Climate Bonds Standard, which ensures the money genuinely contributes to reducing carbon emissions. Acorn’s offer follows the highest global issuance of sustainable bonds with $267 billion raised in the first nine months of 2019, exceeding last year’s total of nearly $260 billion. Kenya’s 31 universities can house only 25% of the nation’s students, forcing thousands others to seek alternative shelter, Acorn said, citing official data. Stanbic said the issue was looking to raise between 2 billion and 5 billion shillings. The bond is “well diversified with significant interest from Kenyan domestic pension funds, commercial banks, insurance and reinsurance companies and non-resident funds.” According to Reuters, “the bond was priced at an interest rate of 12.25% and rated B1 Global, a notch above the Kenyan government’s rating of B2.” Nuru Mugambi, a director at the Kenya Bankers Association, said that green bonds will help protect Kenya from the impact of extreme weather on the agriculture sector, which contributes about one-third of the annual GDP. She said: With the landmark legislation that zero-rates taxes on green bonds, we expect to see more issuance coming to market. According to Green Bonds Programme — Kenya, the objectives are: This is another great step forward for Kenya, who are already green energy leaders in the global movement. Kenyan president Uhuru Kenyatta announced in December 2018 that the country intends to be powered entirely by green energy by 2020 as it scales up renewable investment. This is an ambitious and laudable target. As of December 2018, 70% of the country’s installed electricity capacity came from renewable energy sources — more than three times the global average. Green energy could increase the population’s access to the national power grid, create jobs, and reduce manufacturing costs. The country was Africa’s first geothermal power producer. By 2020, according to USAID, it is expected that 70%-80% of the population will have access to on-grid electricity, compared to less than 46% in 2015. Further, 20% to 30% of the population will potentially receive access to off-grid electricity, primarily through solar, by 2020. Photo credit: Lake Turkana wind project FTC: We use income earning auto affiliate links. More. Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast. VIDEO
Nairobi-based property developer Acorn Holdings issued Kenya's first green bond, raising $41.45m to build climate-resilient student accommodation in the capital. Stanbic Bank, which arranged the deal, announced that much of the interest came from domestic pension funds, commercial banks and insurance firms. The bond was priced at an interest rate of 12.25% with a B1 Global rating, according to Reuters, a level above the Kenyan government's B2 rating. Green bonds will help to protect Kenya's agricultural sector against catastrophic weather incidents, according to the Kenya Bankers Association, with the Green Bonds Programme designed to unlock the potential of green finance.