Kenya has approved its first ever issuance of a green bond, which will raise five-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.
In January, HSBC said global green bond issuance is seen at $140-billion to $180-billion this year.