The Acorn Project, the Issuer of the Acorn Medium-Term Green Note (MTN) program recently closed the final tranche on Friday 16th July, 2021. The Issuer raised Ksh. 2.096 billion against the target of Ksh. 1.438 billion, representing a subscription rate of 146%.

In October 2019, Acorn issued a Ksh. 5 billion MTN program which became the first Green Bond in Kenya. In the process, the first tranche of the issue raised Ksh. 4.262 billion against a minimum target of Ksh. 2 billion. The program enjoys a partial credit guarantee of 50% of the principal and interest by GuarantCo and also received a Ksh. 1.279 billion anchor investment by the Emerging Africa Infrastructure Fund (EAIF), which are both part of the Private Infrastructure Development Group (PIDG).

The initial tranche was deployed towards the construction of 6 environmentally friendly purpose-built student accommodation (PBSA) properties in Nairobi. The buildings are benchmarked against the IFC EDGE green building standard for water, energy and materials use, with the aim of achieving low operation costs and low carbon impact in the long-term.

In May 2021, Acorn was granted approval by the Capital Markets Authority (CMA) to upsize the MTN program from Ksh. 5 billion to Ksh. 5.7 billion. The final tranche was therefore aimed at raising the Ksh. 0.738 billion remaining from the initial program and the additional Ksh. 0.7 billion from the upsized program. The notes available for subscription under the final tranche thereby amounted to Ksh. 1.438 billion. The subscription book was well diversified, with significant interest from Kenyan domestic pension funds, commercial banks, and re-insurance companies.

The additional financing will go towards the development of an additional 2 PBSA properties providing 2,654 beds bringing the total numbers of developments funded under the MTN program to 8 projects providing 7,349 beds.

The Acorn Green Bond is rated B1 Global by Moody’s Investor Service and is listed on the Nairobi Securities Exchange and the International Securities Market of the London Stock Exchange.

Stanbic Bank Kenya acted as the Lead Transaction Advisor and SBG Securities Limited was the Lead Placement Agent for the program.

Commenting on the final tranche closing, Acorn Holdings Group CEO, Mr. Edward Kirathe noted, “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.”

Speaking on behalf of Stanbic Bank Kenya, the CEO, Mr. Charles Mudiwa said, “As a Kenyan Bank, we are honored to be part of such a historic deal. Not only does this demonstrate our overall commitment to contributing to the economic growth of the country, but it also paves way for domestic financing institutions to be part of green financing and have a social impact in the Kenyan market.”