Kenya’ first environment friendly bond targeting to raise five billion shillings goes on sale later this year.
The green bond targets a niche clientele to help the issuer Acorn group raise cash for the construction of students’ hostels.
The Capital Markets Authority has okayed the issue following the unveiling of regulations guiding the issuance of green bonds early this year.
Acorn Group which started off as a project management company in 2001 is set to become the first company in this region to sell a green bond to raise funds for property development in the East African region.
The company that diversified into property development in 2006, has faced challenges raising funds from commercial lenders, as banks shy off from lending to the real estate sector due to a high default rate.
The company currently manages a property portfolio of 55 billion shillings staggered in Kenya and Uganda.
Acorn Group has been aggressive in developing units to accommodate college and university students due to a housing crisis in many parts of the country.
One of its flagship student hostels, Qwetu is located along Baba Dogo road in Ruaraka, which was the first project of its type targeting students.
A statement from the Capital Markets Authority says it has given Acorn Group the go ahead to issue a green bond targeting to raise five billion shillings from investors who will get a funding guarantee of 50 percent from Guarnatico, its main financier.
In its prospect Acorn says it is targeting to put up 3,800 university hostel units in Nairobi and Nakuru among other towns in Kenya at a cost of about 7.4 billion shillings.
The company did not provide details of the listing dates and interest rate offered saying it is still working on the final details of the green bond.