Kenya sets sights on green bonds after mobile phone issue

NAIROBI (Reuters) - Kenya aims to issue its first ‘green’ bond this year, the initiative’s backers said on Friday, bolstering the nation’s reputation for financial innovation after the government launched the world’s first mobile phone bond earlier this month.

The proceeds from so-called green bonds help finance projects in the renewable energy, energy-efficiency, green transport and wastewater treatment sectors.

France and Poland both issued green bonds in the last four months, becoming the first nations to venture into territory previously dominated by development banks and companies.

“I believe we will have the first green bond issued this year,” said Lamin Manjang, chairman of the Kenya Bankers Association (KBA), which is spearheading the green finance initiative.

He did not say who would issue the bond or its potential size. Kenya’s first green bond is likely to be issued privately.

Plans for a green sovereign issue by Kenya will follow after the first issue under the KBA initiative, Central Bank Governor Patrick Njoroge told Reuters earlier this month.

On Friday during the launch of the green bond program, he repeated his support.

“This definitely has legs. This will see the light of day,” he said.

Nigeria has unveiled plans to launch a local currency green bond in April.

The green bond issue will bolster Kenya’s reputation as a financial innovator after the government launched M-Akiba, the world’s first bond sold exclusively over mobile phones, last week.

The mobile phone bond aims to tap a pool of small investors, offering them a bond for as little as 3,000 shillings. The initial offering is 150 million shillings ($1.46 million).

Finance Minister Henry Rotich said the offer had already hit more than half of its target within a week. Nearly 68,400 mobile phone users have invested 79 million shillings.

Habil Olaka, chief executive officer of Kenya Bankers Association, said the green bond would build on M-Akiba’s success.

“We are seeing the success of M-Akiba, (and) us leveraging on it,” he said.

Editing by Katharine Houreld and Toby Davis