Acorn Holding lists its green bond programme on the London Stock Exchange

KENYA – Acorn Holdings Ltd. (Acorn), the largest Purpose-Built Student Accommodation (PBSA) property developer in Kenya, has dual-listed its US$43 million (KSh4.3 billion) green bond programme, on the International Securities Market (ISM) of London Stock Exchange.

To celebrate the Acorn bond programme listing, David Schwimmer, CEO of London Stock Exchange Group, welcomed H.E. President Uhuru Kenyatta of Kenya, the Rt Hon Alok Sharma, UK Secretary of State for International Development, and Edward Kirathe, CEO Acorn Holdings Ltd. to open London’s markets for trading today.

The bond programme first listed at the Nairobi Securities Exchange on 13 January 2020.

The US$43 million medium-term note (MTN) programme will be used to finance the construction of green-certified student properties developed by Acorn; to create clean, safe, and affordable accommodation for 5,000 students in Nairobi.

Structured as a project bond, and the first with a deferred draw down structure, the programme is also the first ever to achieve green certification in Kenya, which ensures that it contributes to reducing carbon emissions.

Moody’s has rated Acorn’s MTN programme B1 which is one notch higher than Kenya’s sovereign rating of B2. This is the first non-governmental green bond rated by Moody’s in Africa.

Kenya plans to issue a sovereign green bond within the next few months, Central Bank governor Patrick Njoroge has said.

In an interview with Reuters, on the sidelines of the World Economic Forum held in Davos, Njoroge who did not give a definite issue date said plans were underway to issue the bond.

“The expectation is that we do it very quickly, within the next few months,” he said.

Proceeds from green bonds are used to finance projects in renewable energy, energy efficiency, green transport, and wastewater treatment sectors.The government initially aimed to raise US$50 million (KSh5.04 billion) through the green financing facility.

“The sovereign green bond will be coming on stream, but also other products, meaning other corporate green bonds. This is not just for the sovereign green bond, it’s really for all financing in the country, be it domestically,” he said.

The government has been postponing plans to issue the green bond having started discussions in 2016 and announcing it would be issued first in 2017.

While the government has continually mooted plans to issue the sovereign green bond, commercial banks have also been planning to issue the bond having already come up with guiding principles.

The sovereign green bond issue is set to bolster Kenya’s reputation as a financial innovator. Njoroge said that the government needs to take austerity measures to relieve the current debt burden currently at Sh5.9 trillion.

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