KCB Unveils KSh300 Billion Sustainability Bond Framework Ahead of First Tranche
KCB Group has unveiled a Sustainability Bond Framework that will guide the planned raising of up to KSh300 billion through a five-year Medium Term Note (MTN) programme, with the first tranche targeting up to KSh100 billion.
The proposed programme, which is subject to regulatory approvals, will provide long-term financing for eligible Green, Blue and Social Projects across areas including renewable energy, sustainable agriculture, clean transportation, affordable housing and enterprise financing.
KCB said proceeds from the bonds will be ring-fenced for eligible projects under the framework. The green category covers renewable energy, green buildings, clean transportation, sustainable water management and agriculture, while blue financing will support activities linked to the blue economy.
The social component will target affordable housing, micro, small and medium-sized enterprises (MSMEs), women- and youth-led enterprises and initiatives that support employment and livelihood creation.
The framework has received a Sustainability Quality Score (SQS) of 2, rated “Very Good”, from Moody’s. It establishes criteria for identifying, evaluating and selecting projects eligible for financing from the bond proceeds.
The planned KSh300 billion programme is expected to be issued in tranches over five years. KCB has indicated that the first tranche will target up to KSh100 billion, with the transaction requiring the necessary regulatory approvals before issuance.
The Group’s framework also provides flexibility around sustainable debt structures, including use-of-proceeds bonds and sustainability-linked bonds, according to information released alongside its launch.
KCB Group chief executive Paul Russo said the framework builds on the lender’s work in developing financing solutions for projects with economic and social impact.
“The launch of the Sustainability Bond Framework is a natural progression of the work the Group has been doing over the last two decades to structure innovative financing solutions and support investments that have a meaningful economic and social impact,” Russo said.
“This is about bringing Capital, Purpose and Accountability and using finance as a force for good while creating sustainable value for all our stakeholders.” he added.
The framework adds to KCB’s existing sustainable finance activities. The Group has disbursed more than KSh187 billion in green loans since 2022, according to information provided at the launch.
KCB’s sustainability financing also includes its accreditation by the Green Climate Fund in 2020, which enabled the lender to support climate mitigation and adaptation projects through green financing.
The proposed bond programme comes as KCB seeks to expand its access to long-term capital while directing funding towards environmental and social projects. The first KSh100 billion tranche will determine the initial scale of the programme once the required approvals are obtained.
