Eco-friendly investors now have a platform to raise funds after East Africa’s premier $ 42 million green bond started trading yesterday at the Nairobi Securities Exchange (NSE).
According to Chief Executive of Nairobi Securities Exchange, Geoffrey Odundo, the corporate green bond is expected to attract both retail and institutional investors that are keen to have green assets as part of their portfolios.
The medium-term note will be used to finance the construction of up to six green-certified properties developed by Acorn to create clean, safe and affordable accommodation for 5,000 students in Nairobi.
A green bond is one whose monies are used to fund environmentally sustainable projects.
The move will help in raising Kenya’s profile internationally as a country committed to fighting climate change and pursuing environmental causes.
According to the NSE, the last corporate bond issued in Kenya was in 2016.
“We expect the new corporate listing to reignite interest for corporates to use the capital markets to raise funds for their expansion activities,” Odundo adds.
Patrick Njoroge, governor of the Central Bank of Kenya, says that the country is prioritizing the use of green finance in order to fund projects that will mitigate the negative impact of climate change- adding that African countries continue to bear the brunt of extreme weather patterns such as floods and drought.
Sam Kimani, chairman NSE said that stock exchanges have a pivotal role to play in supporting green finance so as to help solve the climate challenge by meeting the growing demand for low carbon projects in Kenya.
Kimani adds that financial tools such as green bonds are helping drive more capital towards sustainable development projects.