Green Bonds Kenya: 8 Essential Facts on Acorn, Safaricom and NSE Rules

Updated 7 November 2026

Green bonds in Kenya are fixed-income securities approved by the Capital Markets Authority (CMA) whose money must finance or refinance projects with climate or other environmental benefits. The rules come from CMA’s Policy Guidance Note on Green Bonds (January 2019) and green bond amendments to the Nairobi Securities Exchange (NSE) listing rules. Kenya’s first listed green bond was Acorn’s KSh4.3 billion student-housing note, which began trading on 13 January 2020. Interest on qualifying listed green bonds with at least three years to maturity is exempt from income tax, which is the main reason retail investors now pay attention.

Checked on 7 November 2026 against the CMA Policy Guidance Note on Green Bonds, the NSE green bond listing rules excerpt, the Acorn information memorandum and Safaricom’s 25 November 2025 release. Not investment advice.

1. What counts as green bonds in Kenya

CMA defines a green bond as a fixed-income instrument, listed or unlisted, approved by the Authority, whose proceeds finance new or existing projects with climate or environmental benefits that conform to green guidelines and standards. The NSE rules name the acceptable standards: the International Capital Market Association (ICMA) Green Bond Principles, the Climate Bonds Standard of the Climate Bonds Initiative, Kenyan policies such as the National Policy on Climate Change and the Green Economy Strategy, or another standard accepted by the NSE and CMA. Since April 2025 issuers and banks can also map projects to the Kenya Green Finance Taxonomy.

2. The independent verifier

Every issuer must appoint an independent verifier to carry out a pre-issuance review and confirm to investors, CMA and the exchange that the bond qualifies as green. Under NSE rule 2.13 the verifier must also do annual reviews. It must specialise in assessing green frameworks, be independent of the issuer, its directors and advisers, and follow ICMA’s guidelines for external reviewers or be accredited under the Climate Bonds certification scheme or another acceptable body. The verifier’s report must appear in the information memorandum, so investors can read it before buying.

3. Issuing and listing steps

1. Prepare a green bond framework stating the environmental objectives, project eligibility criteria and how proceeds will be managed and tracked.
2. Obtain the verifier’s pre-issuance report.
3. Prepare an information memorandum under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, including the verifier’s statement.
4. Submit the memorandum to CMA and the NSE together through a transaction adviser. The NSE reviews and sends comments to CMA, which approves or rejects.
5. After approval, list the notes, typically on the NSE fixed income segment.

4. Annual reporting for green bonds

For the life of the bond, the issuer must give investors and CMA an annual green bond report. The guidance note asks for a description of projects and amounts disbursed, the share of proceeds allocated to each, and the expected environmental impact. Investors should treat a missing or vague report as a warning sign that proceeds may not be tracked properly.

5. Tax-free interest on green bonds

The Finance Act 2019 added an exemption to the First Schedule of the Income Tax Act, effective 1 January 2020: interest on listed bonds, notes or similar securities used to raise funds for infrastructure, projects and assets defined under green bond standards and guidelines, and other social services, is exempt from income tax if the securities have a maturity of at least three years. Ordinary corporate bond interest is normally subject to withholding tax, so the exemption raises the effective yield. Issuers sometimes seek a KRA confirmation for a specific issue, so read the pricing supplement’s tax section.

6. Acorn: Kenya’s first listed green bond

Acorn Project (Two) LLP raised KSh4.3 billion in October 2019 through a medium-term note programme to build green-certified student accommodation in Nairobi. CMA approved a restricted public offer on 31 July 2019 and the NSE listing on 13 January 2020. It was a restricted offer to sophisticated investors, with a 50% partial guarantee of principal and interest from GuarantCo. Retail investors could not subscribe at issue, which shaped later deals that opened to smaller savers.

7. Safaricom and KMRC: green and sustainability bonds since 2025

On 25 November 2025 Safaricom opened a KSh15 billion first tranche, issued as a green bond, under a KSh40 billion domestic medium-term note programme, with a KSh5 billion greenshoe option. The offer ran to 5 December 2025 at a 10.4% interest rate that the company described as tax-free, with a KSh50,000 minimum and subscriptions by USSD, online or through stockbrokers. In May 2026 the Kenya Mortgage Refinance Company listed a KSh3 billion sustainability bond to refinance eligible green affordable and social home loans; read our KMRC guide for its lending model. Note the label: a sustainability bond funds both green and social uses, so check which projects qualify for any tax treatment.

8. Checks before you invest in green bonds

• Use of proceeds: read the framework and verifier report, not just the marketing.
• Tenor and tax: confirm the maturity is at least three years and how the issuer treats the exemption.
• Credit risk: “green” says nothing about repayment. Check the issuer’s financials, any rating and any guarantee.
• Liquidity: corporate notes can trade thinly on the NSE, so you may need to hold to maturity.
• Minimums and channels: retail minimums vary by issue, and offers close on fixed dates.

If you want simpler, government-backed income instead, compare options in treasury bonds vs unit trusts.

Frequently asked questions

Are green bonds in Kenya tax-free?

Interest on listed green bonds with a maturity of at least three years is exempt from income tax under the First Schedule of the Income Tax Act, effective 1 January 2020.

What was Kenya’s first green bond?

Acorn’s KSh4.3 billion green note programme, listed on the NSE on 13 January 2020.

Who regulates green bonds in Kenya?

The Capital Markets Authority, through its 2019 Policy Guidance Note, alongside the NSE listing rules.

Can ordinary investors buy green bonds?

Yes, when an issue is a public offer. Safaricom’s 2025 green bond, for example, set a KSh50,000 minimum with mobile subscription.