The World Bank Group’s International Finance Corporation (IFC) has joined hands with the Kenya Bankers Association (KBA) and the Nairobi Securities Exchange (NSE) to support the green bonds program of Kenya’s banking industry through individual bank issuances.
The partnership will provide the member banks of the KBA with technical support in green finance as well as other climate finance initiatives by IFC in South Africa, Turkey and other 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 KBA Chief Executive Officer Habil Olaka.
IFC’s climate-related investments were nearly $2 billion in 2016 with an additional $1.3 billion raised through core mobilization, for a total of $3.3 billion invested in climate-smart projects.
Through its Advisory, IFC enabled more than $1.2 billion in climate-related investments in power, resource efficiency, green buildings and public-private partnerships with new green bond-financed commitments close to $1 billion worth invested in 35 projects across 22 countries, including 16 new markets in 2016.
Kenyan banks will be required to identify their climate-aligned (green) assets that can be refinanced and other assets that can be financed from the green bond proceeds.
Olaka highlighted agriculture and agribusiness; manufacturing; building and construction; transportation and infrastructure; and energy as some of the sectors that require green finance in Kenya.
“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,” Geoffrey Odundo, Chief Executive, NSE said.
To show its commitment, IFC will serve as an anchor investor for the pioneer issuance.