- Date written
- October, 2024
- Contact for guarantco
- Alison Hicks
- Communications Consultant
- +44 (0)738 5551967
- alison.hicks@guarantco.com
- Contact for PIDG
- Cecilie Sorhus
- Chief of Staff and Head of Communications
- +44 (0)7917 302724
- cecilie.sorhus@pidg.org
- Share
GuarantCo, part of the Private Infrastructure Development (PIDG), joined Acorn Holdings in celebrating the successful redemption of the first green bond issued in East Africa. This milestone was recognised with a Bell Ringing Ceremony on 23rd October at Nairobi Securities Exchange.
GuarantCo and colleagues across PIDG, including Infraco Africa, PIDG Technical Assistance and the Emerging Africa & Asia Infrastructure Fund, have worked closely with Acorn Holdings over the past five years to help realise its vision for green, safe and affordable student accommodation in Nairobi.
In October 2019, GuarantCo provided investors with a partial credit guarantee for the initial KES 4.3 billion green bond. The Emerging Africa & Asia Infrastructure Fund was the largest single investor for this bond, with a participation of over KES 1.2 billion. PIDG Technical Assistance provided Acorn with a grant to contribute towards the costs of the bond issue, which created a significant enabling effect for this transaction. This was a landmark transaction as it was the first green bond and project bond to be issued in Kenya.
In February 2021, InfraCo Africa invested KES 1 billion to anchor the launch of Acorn’s Real Estate Investment Trusts, providing important growth equity to the business and catalysing further investment from local pension funds.
Then in September 2021, GuarantCo provided Acorn with a second guarantee to support the KES 1.4 billion upsizing of the Medium-Term Note programme to finance the construction of two additional green-certified student accommodation sites in Nairobi. This expanded Acorn’s capacity by around 50 percent to 7,000 beds. This second issuance was oversubscribed by 46 percent, demonstrating the market interest and confidence Acorn achieved within two years.
From the outset, Acorn’s programme has aligned closely with the mission of PIDG to finance projects aligned to the UN’s Sustainable Development Goals. The construction of the environmentally friendly student accommodation meets international green building standards for water, energy and construction materials, ensuring lower operation costs and a low-carbon impact over the long-term. The project also, importantly, supports gender equality aspirations with half of the students that will call it home to be women. Gender considerations were also factored into the community living spaces.
Surabhi Mathur Visser, Deputy CEO at GuarantCo, said:
“We congratulate the Acorn team on reaching this impressive milestone of the successful redemption of the first ever green bond to be issued in Kenya, and indeed East Africa. It has been a privilege for Guarantco and PIDG to be a part of this impactful story: to play a role in enabling new products into the capital markets and to enable more safe, affordable and environmentally-friendly housing for students in Nairobi.
“This is also a testament to the Acorn team who have been able to raise the standard for property development, mobilise capital markets and bring financial innovation to the region. We wish Acorn continued success in the future and to maintain our strong relationship. We also hope to continue to support the broader Kenyan and East African investment community through PIDG’s offerings to deliver infrastructure.”
Edward Kirathe, CEO of Acorn Holdings, remarked:
“This is a proud moment that exemplifies Acorn’s core values of innovation, sustainability and empowerment. The success of this green bond has exceeded our expectations. It has not only strengthened our financial position and capital markets presence, but also delivered wide-ranging socioeconomic impact – from affordable student housing and climate-conscious development to job creation, particularly for women-owned enterprises. We are honoured to have led the way in driving forward a greener, more inclusive vision of growth in Kenya.
“We set out to prove that business can be a force for good – that profit and purpose can go hand-in-hand. The success of this bond shows that investing ethically and sustainably is not only possible in Africa, but it is the future. We are immensely proud to be pioneers of that future.
“We are grateful to our investors who shared our vision and to our partners for helping turn ambition into reality. As we build on this success, we remain committed to pushing new boundaries in sustainable, climate-smart development and empowering the next generation with access to quality housing.”