The Nairobi Securities Exchange welcomes its first green bond issue, Acorn Holdings, guaranteed by GuarantCo, that will finance clean, safe, affordable and green-certified accommodation for 5,000 students in Nairobi

  • Date written
  • January, 2020

Acorn Holdings (Acorn), the largest student accommodation property developer in Kenya, has listed by introduction its KES 4.3 billion green bond programme, on the Nairobi Securities Exchange (NSE).

To celebrate the Acorn bond programme listing, Sam Kimani, Chairman of the NSE, welcomed the Rt Hon Alok Sharma, UK Secretary of State for International Development, and Patrick P. Njoroge, Central Bank of Kenya Governor, to open trading today. The programme benefits from a B1 global rating, one notch higher than the sovereign rating, and an Aa2.Ke national scale rating from Moody’s, and a partial credit guarantee from GuarantCo (A1), a Private Infrastructure Development Group (PIDG) company.

The medium-term note programme that raised KES 4.3 billion in October 2019 will be used to finance the construction of up to six green-certified student properties developed by Acorn, to create clean, safe and affordable accommodation for 5,000 students in Nairobi.

Structured as a project bond and the first with a deferred draw down structure, the programme is also the first ever to achieve green certification1 in Kenya which ensures that it 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.

Kenya currently faces a chronic shortage of student accommodation as university enrolment in Kenya has grown from 27,000 students in 1990 to around 550,000 students today whilst there are less than 40,000 beds available in the universities, creating a huge deficit. Acorn, the first purpose-built student accommodation (PBSA) provider in Kenya, has stepped in to fill the gap. Since 2015, Acorn has built three PBSA properties with over 1,600 beds and is keen to progress to address the urgent student housing deficit in Kenyan cities.

The Emerging Africa Infrastructure Fund (EAIF), another PIDG company, participated in the issue and is currently the largest single investor with a participation of KES 1.279 billion whilst the PIDG Technical Assistance Facility, through GuarantCo, provided Acorn with a part returnable grant to contribute towards the costs of the loan note issue, creating a significant enabling effect for this transaction.

UK Secretary of State for International Development Alok Sharma said:

This successful listing of Acorn’s bond, developed using UK aid backed expertise, means new, affordable, environmentally-friendly housing for 5,000 Kenyans. I look forward to building more partnerships like this at next week’s UK-Africa Investment Summit in London, which will deliver more investment, jobs and growth to create a successful future for all our people.

Chairman of the Nairobi Securities Exchange, Sam Kimani said:

Stock Exchanges have a pivotal role to play in supporting green finance. The NSE is committed to help solve the climate challenge by meeting the growing demand for low carbon projects in Kenya. Financial tools like green bonds are helping drive more capital to these projects and we commend Acorn for choosing this avenue to raise funds for their purpose-built student accommodation. Listing the bond provides greater visibility and transparency – boosting investor confidence in the bond.

CEO of Acorn Holdings Ltd Edward M. Kirathe said:

It is a great honour for us to have successfully issued and listed the first green bond in Kenya and the region. Having pioneered Purpose Built Student Accommodation in Kenya 3 years ago, we are proud to be pioneering yet another milestone for the country. We are grateful to DFID, GuarantCo and FSD Africa for the unwavering support we received without which it would not have been possible to issue and list this bond. The bond will enable Acorn to deliver an additional 5,000 beds to address the severe shortage of decent, safe and secure student accommodation in Nairobi.

CEO of GuarantCo Lasitha Perera said:

We are delighted to have closed another local currency deal through the Acorn transaction to support thousands of students to fulfil their potential and leading the way by setting new standards of quality, safety, convenience and comfort in the provision of purpose-built accommodation. This first non-governmental green bond rated by Moody’s in Africa will serve as an example for other corporate issuers who wish to seek funding from institutional investors, such as pension funds, and will help to kick-start the dormant bond market in Kenya.

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.

Alok Sharma opening the market.

Edward Kirathe giving a speech.


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 PIDG, and the Netherlands, through FMO and PIDG. GuarantCo is rated AA- by Fitch and A1 by Moody’s.


About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 183 infrastructure projects to financial close and provided 243 million people with access to new or improved infrastructure. PIDG is funded by six governments (the UK, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC.