Kenya to issue Africa’s first sustainability-linked bond worth $500m
TLDR
- Kenya to issue Africa's first sustainability-linked bond with World Bank assistance, targeting $500 million.
- Lead by Isfandyar Zaman Khan, the bond issuance set for November with pre-established sustainability targets.
- Proceeds from the bond aimed at tackling Kenya's budget deficit.
The World Bank is assisting Kenya in issuing Africa's inaugural sustainability-linked bond by the year's end, as the East African nation diversifies its external funding channels.
Projected to amount to $500 million, this bond will incorporate pre-established sustainability performance targets. Isfandyar Zaman Khan, the lead financial sector specialist at the World Bank Kenya, indicated that the bond issuance is slated for November.
Kenya is poised to become the pioneering African sovereign to introduce a sustainability-linked bond (SLB). The proceeds from this issuance are earmarked to address the country's budget deficit. Meanwhile, last October, Egypt issued the MENA's first panda bonds of the same size.
Key Takeaways
This initiative underscores Kenya's commitment to sustainable financing and marks a significant milestone in Africa's evolving financial landscape. Following in the footsteps of Chile, which raised $2 billion last year, and Uruguay, the Democratic Republic of Congo is considering the issuance of a sustainability-linked bond, mirroring Kenya's endeavor to broaden its funding base. Apart from the sustainability-linked bond initiative, Kenya intends to expand its funding options through the issuance of other bonds, including the Japanese Samurai bond and the Chinese panda bond. The East African nation will also secure an IMF loan. These funds will be utilized to repurchase a portion of the 2014 Eurobond, which is due to mature in June of this year.
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