As the world intensifies its focus on sustainable finance, the Green Bond market has emerged as a powerful tool for financing environmentally beneficial projects.
In Kenya, the Green Bond Market provides a platform for organizations committed to sustainability. However, gaining entry into this exclusive space comes with specific requirements aimed at ensuring the issuer aligns with the principles of green finance.
Listing Requirements for the Green Bond Market in Kenya:
- Incorporation Status:
- The issuer seeking listing on the Green Bond Market must be a body corporate.
- Share Capital and Net Assets of the Issuers:
- The issuer must demonstrate financial robustness, having a minimum issued and fully paid-up share capital of fifty million shillings and net assets of one hundred million shillings before the public offering or listing of the securities.
- Listing and Transferability of Securities:
- All fixed-income securities offered to the public, excluding commercial papers, must be listed. Furthermore, they should be freely transferable without any restrictions on marketability or pre-emptive rights.
- Availability and Reliability of Financial Records:
- The issuer must provide audited financial statements compliant with International Financial Reporting Standards (IFRS). These statements should cover an accounting period ending no more than four months prior to the proposed date of the offer. Additionally, the latest financial statements must be prepared on a going concern basis, with the audit report containing no emphasis of matter or qualification in this regard.
- Profitable Historic Track Record and Future Prospects:
- The issuer must exhibit financial stability and sustainability by declaring profits after tax attributable to shareholders in at least two of the last three financial periods preceding the application for the Green Bond issue.
- Debt Ratios:
- Total indebtedness, which includes the new issue of fixed-income securities, should not exceed four hundred per centum of the company’s net worth, represented by a gearing ratio of 4:1 as per the latest balance sheet.
Conclusion:
Listing on the Green Bond Market in Kenya is not only a financial decision but a commitment to environmentally responsible financing. These stringent requirements ensure that only entities with a genuine dedication to green initiatives gain access to this exclusive market.
As sustainability becomes a focal point for investors and regulators, the Green Bond Market in Kenya stands as a testament to the country’s dedication to fostering environmentally conscious financial practices.
