Three Kenyan Firms Plan to Issue Green Bonds, FSD Africa Says

Three Kenyan companies including an unidentified lender and the state-backed Kenya Mortgage Refinance Co. are preparing to issue green bonds, as Africa’s share of environment-friendly financing increases, according to FSD Africa.

“There are some live conversations that are ongoing within the banking sector and even outside,” Evans Osano, financial- markets director at FSD Africa, the U.K. government’s Nairobi- based financial-sector development agency in Africa, said in an interview. Working in partnership with the Kenya Bankers Association, “the intention was to support some of the larger banks to come on their own and the smaller ones to come in a pooled manner,” he said.

There is about $1 trillion of outstanding green bonds globally, $3.5 billion which is in Africa, according to FSD Africa. The agency has supported issuance of almost $200 million of green bonds across the continent, mostly in Nigeria and Kenya. It has active projects in about 20 Africa nations covering both country-specific projects and regional initiatives.

Acorn Project (Two) LLP, which was supported by FSD Africa, issued Kenya’s maiden green bond in Oct. 2019 and closed the second tranche this month.

FSD Africa is collaborating with local and international institutions, including Kenya’s National Treasury and the University of Cambridge Institute for Sustainability Leadership, to offer climate-finance training to policy makers across the continent from next month, as part of a plan to expand access to funding for climate mitigation and adaptation on the continent, he said.

“We are very interested in making sure that we have enough locally based institutions that can get accredited and that they are in a position to prepare projects that can be funded or that are bankable,” Osano said.

Most of the green financing transactions in Africa are for renewable energy and climate-smart housing, while it is expected that demand for similar projects in mass public transport — which causes a lot of environmental pollution — and agriculture will grow, he said.

Source: Bloomberg