One of Africa’s largest economies is set to announce a national green bonds policy next year.
According to media reports, the Kenyan government is working on a framework to chalk out a national green bonds policy. The first glimpses of the policy are expected when the government tables the financial budget for 2017/18 next year.
Capital Markets Authority CEO Paul Muthaura announced that his agency is working on proposals being shared by various stakeholders during roundtable discussions for the financial budget.
Kenya, being a member of several international conventions, is also working with foreign governments to borrow best practices while drafting its own green bonds policy. Mathaura stated that this agency is in contact with South African officials as the country is the largest green bonds market and a renewable energy leader in Africa.
Currently, infrastructure bonds in Kenya enjoy tax-free revenue; Mathaura said that similar tax incentives shall also be available to green bonds. The goal will be to make Kenya a regional hub for green bonds.
As the global green bonds market grows rapidly governments are now looking to develop specific policies to attract investors who prefer investments in low-carbon infrastructure. India and China are currently the only two countries that have issued national guidelines for issuance, use of funds raised and listing of green bonds. Development of such government-backed policies and frameworks shall boost investor confidence and bring in more national and foreign funding to the low-carbon infrastructure.