GuarantCo provides Acorn Holdings Limited with second guarantee of KES 1.4 billion to support additional green-certified student accommodation in Nairobi

  • Date written
  • September, 2021

GuarantCo, a Private Infrastructure Development Group (PIDG company, has provided Acorn Holdings with a second guarantee of KES 1.4 billion (c. USD 12.9 million) to support the upsizing of a Medium Term Note (MTN) programme to finance the construction of two additional green-certified student accommodation sites in Nairobi. It is expected to expand bed capacity by nearly 50 percent to 7,295 beds.

GuarantCo provides Acorn Holdings Limited with second guarantee of KES 1.4 billion to support additional green-certified student accommodation in Nairobi

Acorn Project Two Limited Liability Partnership, the Issuer of the Acorn MTN programme, closed the second and final tranche on 16th July 2021 and raised KES 2.096 billion against the target of KES 1.438 billion, achieving a subscription rate of 146 percent.

GuarantCo expects that its second transaction will further result in market transformation through replication by institutional investors in the purpose build student accommodation market to the benefit of students who can live in high quality and affordable accommodation. The accommodation caters for both men and women, with women expected to be around 50 percent of the student and gender considerations factored into the community living spaces. The additional funds raised will also lead to further job creation and have a wider economic impact through project contracts to local businesses.

In October 2019, GuarantCo provided investors with a partial credit guarantee to cover 50 percent of principal and interest due under the KES 5 billion note programme that raised KES 4.3 billion. The Emerging Africa Infrastructure Fund (EAIF), another PIDG company, participated in the issue and was the largest single investor with a participation of KES 1.279 billion. The funds are being used to finance the construction of six green-certified student properties, creating clean, safe and affordable accommodation for students in Nairobi.

Emily Bushby, Interim CEO of GuarantCo, said:

We are delighted to continue to support Acorn through our second transaction and make a contribution to transforming the bond market in Kenya which the second tranche of Acorn’s note programme with a 146 percent oversubscription clearly demonstrates.  Acorn is a perfect example of various PIDG companies working together including GuarantCo, the Emerging Africa Infrastructure Fund, InfraCo Africa and PIDG Technical Assistance.  The transaction will contribute towards SDG 4 (education), SDG 5 (gender equality) and SDG 11 (sustainable cities and communities). 

Edward Kirathe, Group CEO of Acorn Holdings, said:

We see the oversubscription of our Green Bond as a huge vote of confidence for Acorn and the wider Capital Markets especially given the on-going COVID-19 pandemic. Despite the pandemic, the Acorn Green Bond has continued and will continue to pay coupons promptly due to the appropriate project bond structure that was adopted at the outset.  When we started this journey in 2019, the Bond Market in Kenya had essentially dried up with new issuances non-existent. Now we are seeing new corporate bond issuances coming to the market and this is a very positive development for the Kenyan Capital Markets. We continue to be grateful for the support we continue to receive from GuarantCo and PIDG as part of our journey to providing safe, secure and affordable accommodation to University and College students in Kenya”.


The note programme is the first ever to achieve green certification[1] in Kenya, which ensures the programme genuinely contributes to reducing carbon emissions. The construction of the environmentally friendly student accommodation will meet international green building standards for water, energy and construction materials, ensuring lower operation costs and a low-carbon impact over the long-term. Moody’s has rated Acorn’s medium-term note programme B1 which and is one notch higher than Kenya’s sovereign rating of B2. The Acorn green bond was listed on the Nairobi Securities Exchange and the International Securities Market of the London Stock Exchange in January 2020.

In February 2021, Acorn launched its Development Real Estate Investment Trust (D-REIT) and Income-REIT (I-REIT) with support from InfraCo Africa, another PIDG company, that acted as anchor investor and committed over KES 1 billion. As part of this transaction, the Acorn green bond was transferred to the D-REIT. All student accommodation projects are now being developed and constructed through the D-REIT and then sold to the I-REIT once operational. This approach unlocks construction capital and enables it to be recycled into new developments.


[1] The green certification was independently verified as meeting the Climate Bond Standard and Certification Scheme of the Climate Bonds Initiative and was funded by FSD Africa.


About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC.

About Acorn Holdings Limited

Established in 2001, Acorn has over 20 years’ experience in East Africa’s real estate sector. Acorn is the largest provider of purpose-built student accommodation (PBSA) in East and Central Africa and provides 3,000 operating beds with about 6,000 beds in the pipeline. In 2019, with the support from GuarantCo, Acorn raised the first Green Housing Bond in Africa which was subsequently listed in the Nairobi Stock Exchange and London Stock Exchange. Subsequently, in February 2021 with support from InfraCo Africa, Acorn successfully launched the Acorn Student Accommodation REITs after receiving all the requisite approvals from CMA. The REITs are managed by Acorn Investment Management Limited (AIML), a wholly owned subsidiary of Acorn.