The Nairobi County Government has announced that it will issue a $1.2 billion green bond. The proceeds will be used to finance environmentally friendly infrastructure.

With a population of 4.9 million, the city of Nairobi is not spared from the drought that is undermining people’s livelihoods in Kenya. Against this backdrop, the county government is planning to launch a Sh150 billion ($1.2 billion) green bond on the Nairobi Stock Exchange (NSE) to accelerate the green transition.

The funds raised will be used to finance renewable energy, energy efficiency, sustainable transport and water infrastructure. These projects will ultimately contribute to Kenya’s climate change adaptation. “The exchange is ready to guide the Nairobi County Government in developing the bond, which would seek to tap into the growing green finance segment,” promises Kiprono Kittony, the chairman of NSE. If successful, this financial transaction will make Nairobi the second county after Laikipia to issue a green bond in Kenya.

The Green Bond Programme

The Kenyan government launched the Green Bond Programme in 2017, an initiative that aims to promote innovation in the financial sector by developing a local green bond market. The programme is supported by several development partners, including Kreditanstalt für Wiederaufbau (KfW), the German development agency, the Netherlands Development Finance Corporation (FMO), the World Bank’s International Finance Corporation (IFC), and the World Wildlife Fund (WWF).

In 2019, Nairobi-based property developer Acorn Holdings secured 4.3 billion shillings ($35.7 million) in a green bond managed by Stanbic Bank, a financial institution based in Johannesburg, South Africa. The funds were used to finance the company’s green projects, including the construction of green student housing, renewable energy production, sustainable waste and water management, sustainable land use, etc.