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CRDB’s Kijani Bond raises Sh172 billion for green sustainability financing
The Commissioner of the Financial Sector Development Department at the Ministry of Finance, Dr Charles Mwamaja (centre), arrives at an event to announce the results of CRDB Bank’s Kijani Bond in Dar es Salaam. The Commissioner was received by CRDB Bank’s Group CEO and managing director, Abdulmajid Nsekela (right), and the chief financial officer of CRDB Bank, Fredrick Nshekanabo (right).
PHOTO | THE CITIZEN CORRESPONDENT
What you need to know:
- The Kijani Bond offering, which opened on September 1, 2023m and closed on October 6, 2023, managed to raise Sh171.82 billion against an initial target of Sh40 billion
Dar es Salaam. CRDB Bank announced yesterday that its “Kijani Bond” was subscribed by 429.55 percent, bolstering the funding for the advancement of green, social, and sustainability initiatives in Tanzania.
The “Kijani Bond” offering, which opened on September 1, 2023, and closed on October 6, 2023, managed to raise Sh171.82 billion against an initial target of Sh40 billion.
The bank said on Friday last week that a total of 1,754 investors have injected their funds into the Kijani Bond, 99 per-cent of whom are Tanzanians.
“The amount raised, out of which Sh140 billion is a fresh infusion of capital, will serve as a potent catalyst for advancing green, social, and sustainability initiatives in Tanzania,” the bank’s managing director, Mr Abdulmajid Nsekela, said during an event to announce subscription level of the Kijani Bond.
The event was graced by the Commissioner of the Financial Sector Development from the Ministry of Finance, Dr Charles Mwamaja.
Mr Nsekela said the raised amount underscored the bank’s determination to facilitate projects dedicated to safe-guarding the environment.
The funding will be directed towards supporting projects focused on environmental preservation, including green agriculture, sustainable energy, eco-friendly industries, green construction, water, health, and education.
The CEO of the Tanzania Capital Market and Securities Authority (CMSA), Mr Nicodemus Mkama, said the Kijani Bond would play a significant role in advancing the cause of green financing in Tanzania.
The bond has been listed on the Dar es Salaam Stock Exchange (DSE), where it is expected to stimulate trading activities.
“The listing of the Kijani Bond will significantly increase the trading of securities at DSE, doubling it from the current average of Sh150 billion to over Sh300 billion,” said the CEO of DSE, Ms Mary Mnisawa.
Dr Mwamaja said Tanzania was in dire need of raising $19.2 billion in funding for green financing to meet its Nationally Determined Contribution targets by 2030, hence the need for strategic cooperation between the public and private sectors.
“Tanzania needs approximately $19.2 billion in funding to meet its Nationally Determined Contribution targets by 2030, with a significant portion of this funding expected to originate from the private sector. On behalf of the government, I extend sincere appreciation to CRDB Bank for its pioneering role in this endeavour through initiatives like the Kijani Bond and other programmes such as the Tanzania Agriculture Climate Adaptation Technology Deployment Programme (TACADTP) in partnership with the United Nations Green Climate Fund,” he emphasised.
The head of the economic section at the British High Commission, Euan Davidson, said the UK was proud to have sup-ported the Kijani Bond through the contributions of Financial Sector Deepening (FSD) Africa, backed by UK Development. Notably, FSD Africa’s contributions to the Kijani Bond include providing with Second Party Opinion technical assistance on the bond, developing the sustainability bond framework, portfolio review, and post-issuance support.
“The huge demand recorded for this issuance among both institutional and retail investors, as well as the involvement of leading international institutions, constitutes strong endorsements of Tanzania’s financial sector and is testimony to the great appetite for financing green projects among investors of all kinds, both international and domestic,” added Euan Davidson.
The International Finance Corporation (IFC), a part of the World Bank, is among the major investors who contributed significantly to the sale of the bond. The IFC alone has invested $20 million, which represents 29.3 percent of the total investment.
“Mobilising resources for climate mitigation and adaptation remains a major opportunity for Tanzania and will require additional financing from the private sector. CRDB Bank’s bond is critical to increasing access to local currency financing to drive Tanzania’s green and inclusive growth,” said the Regional Industry Manager of the IFC, Jes Chonzi.
Stanbic Bank assumes the pivotal role of lead arranger and bookrunner for the Kijani bond issue, with Denton Tanzania Law Chamber providing legal advisory services. Orbit Securities Tanzania serves as the sponsoring broker, while KPMG is entrusted with the responsibilities of the reporting accountant.
The “Kijani Bond” is the first tranche of CRDB Bank’s $300 million multi-currency Medium Term Note programme under the bank’s newly established Green, Social, and Sustainability Bond Framework, aimed at financing green, social, and sustainability projects. CRDB Bank remains committed to further driving Tanzania’s green and inclusive growth through environmentally friendly projects and initiatives.
