May 24, 2018 / 11:32 AM / in a year

Kenya aims to issue green sovereign bond in 2018/19

NAIROBI, May 24 (Reuters) - Kenya plans to make a “green” bond issue in the 2018/19 (July-June) fiscal year, senior government officials said on Thursday, as the country diversifies its borrowing on financial markets.

The proceeds from green bonds help to finance projects in the renewable energy, energy-efficiency, green transport and wastewater treatment sectors.

Kamau Thugge, Principal Secretary at the Finance Ministry, said that with a budget deficit of about 575 billion shillings ($5.7 billion) - equal to 5.7 percent of annual gross domestic product - there was room to raise funds using green bonds for existing infrastructure projects.

“It is not going to be new projects that are put into the budget,” Thugge told reporters. “We would like to move as quickly as possible.”

Geoffrey Mwau, director general of budget, fiscal and economic affairs at the finance ministry, said the initial amount the government aimed to raise would be about $50 million.

Like other African nations, Kenya needs to raise billions of dollars to invest in infrastructure projects including roads, water and irrigation, railways and power generation.

Last month, privately-run non-profit Kenya Pooled Water Fund said it planned to issue a 1.5 billion shilling bond and to have it certified as a green bond, with its proceeds expected to fund water utilities. ($1 = 100.9500 Kenyan shillings) (Reporting by George Obulutsa; editing by Elias Biryabarema and David Stamp)

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