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Nairobi County to float a Green bond, Sakaja says

Nairobi City County Government will float a Green bond that will be used to build a mass transit system and expand the infrastructure for waste management and water distribution.

Speaking at the Nairobi Securities Exchange (NSE), Nairobi Governor Johnson Sakaja said the exact amount to be raised will be announced later.

“We need to offer the residents of Nairobi solutions that clear the mess that has been witnessed over the years. We intend to float a green bond, and what we raise will be used to create order and also open up opportunities for our people and also make Nairobi work for everyone,” the Governor said.

He was speaking during the launch of the enhanced NSE marketplace.

The Governor added that part of the green bond will also be used on sorting out the garbage issue in Nairobi by converting waste into energy. The intention, he said, is to deal with waste collection as well as create employment.

The Governor said the Kenya Kwanza Government has placed a special focus on domestic capital mobilization which is critical in supporting medium to long-term fiscal consolidation plans.

“The visit by His Excellency the President to NSE highlights the Government efforts to stimulate private investments in public assets and projects with a view to strengthening the fiscal position of the country, reduce reliance on foreign debt as well as boost economic recovery through capital markets,” Sakaja added.

According to Sakaja, the Nairobi Water and Sewerage Company alone will need a capital investment of about Ksh 30 billion to be able to offer services and develop proper water and waste management system that will serve the people of Nairobi.

“We look forward to partnering with the Ministry of Investments, Trade and Industry and associated state corporations and agencies to conceptualize and explore county financing options through the NSE to facilitate the mobilization of low-cost and long-term private capital to finance, or refinance the County’s projects,” said Sakaja.

What is a Green Bond

A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.

These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.​

Green bonds are also designated bonds intended to encourage sustainability and to support climate-related or other types of special environmental projects.

More specifically, green bonds finance projects aimed at energy efficiency, pollution prevention, sustainable agriculture, fishery and forestry, the protection of aquatic and terrestrial ecosystems, clean transportation, clean water, and sustainable water management.

They also finance the cultivation of environmentally friendly technologies and the mitigation of climate change.

Green bonds may come with tax incentives such as tax exemption and tax credits, making them a more attractive investment

The Green Bonds Programme-Kenya

​The Green Bond Programme – Kenya, which aims to promote financial sector innovation by developing a domestic green bond market, is brought together by the Kenya Bankers Association (KBA), Nairobi Securities Exchange (NSE), Climate Bonds Initiative, Financial Sector Deepening (FSD) Africa and FMO – Dutch Development Bank.

Other partners who provide technical assistance and guidance include International Finance Corporation (IFC) and the WWF – Kenya.

The Green Bonds Programme – Kenya is endorsed by the National Treasury, Central Bank of Kenya and Capital Markets Authority with the Central Bank of Kenya Governor, Dr Patrick Njoroge serving as the patron.

KBA serves as the Program Secretariat.

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