Ajabu Africa News

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Business at the Nairobi Securities Exchange. Banks are planning to issue a green bond in the next six to eight months to raise money to fight climate change. PHOTO | FILE

By:

GEOFFREY IRUNGU

Posted:

Aug,08-2016 14:02:39

Kenya's commercial banks are planning to issue a green bond in the next six to eight months to raise money to fight climate change.

In a joint statement, the Kenya Bankers Association (KBA) and the Nairobi Securities Exchange (NSE) said the country's first bank--supported climate change-aligned corporate debt instruments will pave the way for Kenya to join its peers in the continent who have already tapped the growing investor demand for green investments.

The collaboration between the KBA and the NSE is in line with the Exchange's commitment to develop sustainable capital markets through the United Nations-led Sustainable Stock Exchanges (SSE) Initiative.

The initiative provides a framework for innovation within the capital markets, and is reinforced by the Sustainable Finance Initiative championed by KBA on behalf of the banking industry and the broader financial services sector.

Institutions supporting the green bond initiative include the Central Bank of Kenya, the Capital Markets Authority and the National Treasury.

Kenya's Green Economy Strategy and Implementation Plan, and the UN Sustainable Development Goal on Climate that calls for urgent action to combat climate change and its impacts by the year 2030 also support the initiative.

"We have had advanced discussions with the NSE and Central Bank of Kenya, which resulted in various proposals to be explored. Now that we have industry support, we are able to develop the roadmap and capital raising strategy," KBA CEO, Habil Olaka said at a consultative forum between banks, NSE and the investment community.

"We are also very pleased that National Treasury and Capital Markets Authority have expressed willingness to align public and private sector efforts so as to position Kenya as the leading green bond market in East Africa," he said.

Speaking in the same forum, the NSE chief executive Geoffrey Odundo said they have partnered with KBA to come up with a cooperative finance model which will see a credit-enhanced special purpose vehicle (SPV) formed by KBA.

Source:

Nation