Kenya has approved its first ever issuance of a green bond, which will raise 5 billion shillings ($48.45 million) for student accommodation, the capital markets regulator CMA said on Thursday.
So-called green bonds are fixed income securities that raise capital for projects in renewable energy, energy efficiency, green transport and waste-water treatment.
The bond, to be issued by a Nairobi-based property developer called Acorn, comes after authorities unveiled new rules in February designed to guide the issuance of green bonds.
"The issuance is a critical step in advancing the development of an effective ecosystem to support the establishment of green capital markets in Kenya," the CMA said in a statement.
Acorn's issue, which will not be listed, will finance the construction of "sustainable and climate-resilient student" hostels, CMA said.
It will be structured as "restricted public offer", meaning the issuers will target sophisticated investors who will get a 50% guarantee from credit guarantees provider Guarantco on both their investments and the interest, CMA added.
Acorn was not immediately available for comment.