Banks, under the umbrella body of the Kenya Bankers
Association (KBA), have signed a Memorandum of Understanding (MOU) with
the International Finance Corporation (IFC), and Nairobi Securities
Exchange (NSE) with the purpose of spurring the development of the
banking industry’s green bonds program through individual bank
The collaboration between KBA, the IFC and the NSE will aim to
provide KBA member banks with technical support in green finance in
conjunction with other climate finance initiatives undertaken by IFC in
other markets, including South Africa and Turkey.
The partnership will also serve to support Kenya’s Vision 2030
ambition to become a leading financial centre in Eastern and Southern
Africa and one of Africa’s fastest-growing economies.
KBA Chief Executive Officer, Habil Olaka, acknowledged IFC’s global
experience in sustainable finance. The IFC fosters sustainable economic
growth in developing countries by financing private sector investment,
mobilizing capital in the international financial markets, and providing
advisory services to businesses and governments.
In 2016, IFC’s climate-related investments were close to $2 billion
and an additional $1.3 billion was raised through core mobilization, for
a total of $3.3 billion invested in climate-smart projects.
In addition, through its Advisory, IFC enabled more than $1.2 billion
in climate-related investments in power, resource efficiency, green
buildings, and public-private partnerships. Especially, in 2016 new
green bond-financed commitments were close to $1 billion worth invested
in 35 projects across 22 countries, including 16 new markets.
“There is a great opportunity for banks to attract funding aligned to
climate change issues and we welcome the technical assistance and
advisory support from IFC towards this end,” said Mr. Olaka. “The
sectors in Kenya that require green finance include agriculture and
agribusiness; manufacturing; building and construction; transportation
and infrastructure; energy, among others. There is no shortage of
investment opportunity. Therefore, we hope banks in this market will
consider how they can tap this investment opportunity towards building
their portfolios while also contributing to Kenya’s sustainable
development,” he said.
The Nairobi Securities Exchange Chief Executive, Geoffrey Odundo said
that the NSE was enthusiastic that Kenya had the opportunities for
green finance and banks would be able to tap the capital markets to
attract new investors with dedicated allocations aligned to climate
change mitigation and adaptation, as well as the Sustainable Development
“The Exchange fully supports green financing and we see huge growth
potential for the sector,” said Mr. Odundo. “The world continues to
aspire for green and inclusive growth and we urge our listed and non –
listed entities to embrace the green bond market as an innovative and
alternative way of raising finance from both domestic and external
sources for sustainability-driven investments. The introduction of the
issuance of green bonds will increase the priority for sustainable
development within the region,” he said.
With IFC’s support, banks in Kenya will review their portfolios to
identify climate-aligned (green) assets that can be refinanced as well
as new assets that would form the pipeline to be financed from the green
IFC has also committed to catalyse Kenya’s green bond market by serving as an anchor investor for the pioneer issuance.