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Banks, under the umbrella body of the Kenya Bankers Association (KBA), have signed a Memorandum of Understanding (MOU) with the FMO to drive green financial development in Kenya and contribute towards a more sustainable future in the country. Specifically, FMO will support KBA develop the framework to create the industry’s first pooled green bond facility. The facility that would allow KBA member banks, especially Tier 2 and Tier 3 banks, and corporates to take advantage of wholesale debt capital markets.
FMO joins other partners of the Kenya Green Bond Program which is coordinated by KBA in partnership with Nairobi Securities Exchange and Climate Bonds Initiative. The partnership in line with Kenya’s Vision 2030 to become a leading financial centre in Eastern and Southern Africa and one of Africa’s fastest-growing economies, will seek to tap into the expertise and experience of FMO in diverse markets and provide long term commitment to green financial development and sustainable investment in Kenya.
KBA Chief Executive Officer, Habil Olaka, acknowledged the emerging impact of green bonds as one of the primary sources of financing for renewable energy and other green economy sectors around the world with green bond issues amounting to approximately USD 46 billion in 2015.
“Globally, the world economies are fast growing and adopting sustainable finance initiatives. As a country, transitioning to a sustainable economy in areas of agriculture, manufacturing, infrastructure, energy among other sectors is vital as banks tap into investment opportunities brought about by developing the first green bonds market in Kenya,” he said.
“The partnership with FMO will contribute to the development of the financial sector in Kenya on a scale above other African countries. By collaborating with an experienced, like-minded investor such as FMO, will ensure immeasurable sustainable benefits for our economies future,” he added.
Speaking during the MOU signing, Geoffrey Odundo, CEO of the Nairobi Securities Exchange said: “We are happy to see interest from donors and are delighted to have FMO join the Kenya Green Bond Program. We are pleased that FMO is coming on board to assist KBA structure a vehicle that will help banks actively participate in the growing green finance market,” he said.
Jurgen Rigterink, Chief Executive Officer of FMO said that FMO is committed to develop and strengthen the green bonds market in Kenya with a vision to positively impact economic growth in the country.
“We are very enthusiastic to be part of the sustainable revolution in Kenya and being able to contribute in substantive sustainable ways towards improving environmental and social responsibility, and sustainable business practices. In addition, FMO is glad to see how the Green Bond Program builds on the Sustainable Finance Initiative, the banking sector initiative which FMO was also proud to be part of,” Rigterink said.