Prime
CRDB issues Tanzania's first green bond and the largest in sub-Saharan Africa
What you need to know:
- The Sh780 billion Kijani Bond offers investment an attractive investment avenue that yields at 10.25% interest per annum
- Tanzania joins other African countries in the green bond issuance, including South Africa, Ghana, Nigeria and Kenya
Dar es Salaam. Investors in Tanzania can finally invest in an environmentally friendly avenue and yield lucrative returns, thanks to the unveiling of CRDB Bank’s green bond yesterday.
Known by the Kiswahili word Kijani (green), the $300 million (about Sh780 billion) Kijani Bond offers investors an attractive investment avenue that yields an impressive 10.25% interest per annum.
And, according to CRDB Bank’s chief executive officer, Mr Abdulmajid Nsekela, the Kijani Bond is accessible to all, contrary to misconceptions.
“This is an investment that even an average Tanzanian can partake in and benefit from, with a minimum initial investment of just Sh500,000... It offers an attractive investment yielding an impressive 10.25 percent interest per annum,” Mr Nsekela said during the launch of the bond in Dar es Salaam yesterday.
CRDB Bank seeks to raise Sh40 billion during the first phase of the bond.
The Minister of State in the President’s Office (Investment and Planning), Prof Kitila Mkumbo, graced the launch and hailed CRDB Bank for ushering in a new era of sustainable investment options.
Prof Mkumbo acknowledged CRDB Bank’s role in providing local institutions a pathway to harness the transformative potential of green bonds and highlighted the government’s dedication to fostering an enabling environment for investors by enhancing existing policies, laws, and regulations.
“CRDB Bank has already set an exemplary precedent,” he remarked.
The issuance of the Kijani Bond, with its multi-currency Medium Term Note (MTN) Programme of $300 million, signifies a monumental stride towards realising Tanzania’s National Financial Sector Development Master Plan 2020/21–2029/30, a strategic blueprint to empower both the public and private sectors for the greater welfare of the people.
Mr Nsekela emphasised the unparalleled stability of this investment, insulating investors from market fluctuations.
The Kijani Bond will remain on offer from its launch on August 31 to October 6, 2023. It will then be listed on the Dar es Salaam Stock Exchange (DSE).
The financial instrument is the largest green bond not only in Tanzania but across sub-Saharan Africa.
“CRDB Bank has often been a pioneer,” remarked the CRDB Bank board chairman, Dr Ally Laay, who thanked the Capital Markets and Securities Authority (CMSA) for approving the green bond. He noted that both local and international investors have the opportunity to benefit from the bond, as it offers loans in Tanzanian shillings or US dollars.
The first tranche of the Bond has a green shoe option of up to Sh15 billion, which will allow the bank to raise up to Sh55 billion.
The CMSA CEO, Mr Nicodemus Mkama, who also graced the event, lauded the CRDB Bank for achieving the historic milestone and reaffirmed the alignment of the green bond with international standards.
“We expect that Kijani Bond will be instrumental in further developing green financing in Tanzania,” he said.
The CMSA’s endorsement underscores its confidence in CRDB Bank’s commitment to sustainable financing and sets the stage for significant growth in climate financing.
The director for capital markets at Financial Sector Deepening (FSD) Africa said the issuing of the trailblazing green bond demonstrates that Tanzania’s rapidly expanding green economy presents huge opportunities for investors, both international and domestic.
FSD Africa provides technical assistance in Kijani Bond issuance, while Stanbic Bank assumes the role of lead underwriter and bookrunner for the forthcoming green bond issue.
