Kenya Mortgage Refinance Company (KMRC) has announced plans to raise KSh 3 billion through a sustainability bond issuance scheduled for 28 April 2026.
This will be the second tranche of its KSh 10.5 billion bond programme and marks the second green-debt issuance in Kenya within four months, following Safaricom PLC’s KSh 40 billion sustainability-linked bond in December 2025.
The new note will have an eight-year tenor and a 5.1-year average weighted life, with investors repaid gradually rather than through a single bullet payment at maturity.
All net proceeds will be used to refinance eligible green home loans and social home loans in line with KMRC’s March 2026 Sustainable Finance Framework.
Key Features of the Issuance
- Tenor and Repayment Structure: Eight-year maturity with a 5.1-year average weighted life and amortising repayments.
- Use of Proceeds: Dedicated exclusively to refinancing green and social home loans that meet the criteria outlined in KMRC’s Sustainable Finance Framework.
- Timeline: Offer period runs until 12 May 2026, with listing on the Nairobi Securities Exchange expected on 25 May 2026.
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This issuance comes four years after KMRC’s debut corporate bond in 2022, which raised KSh 1.4 billion and was heavily oversubscribed.
The timing reflects improved market conditions following a period of elevated interest rates that had previously constrained the company’s return to the capital markets.
Strategic Significance
The bond is expected to support the continued growth of KMRC’s loan book, which increased from KSh 11.9 billion in 2024 to KSh 19.6 billion in 2025.
By tapping the sustainable debt market, KMRC is reinforcing its leadership in green and social finance while expanding access to affordable housing in Kenya.
This transaction further demonstrates the growing maturity of Kenya’s capital markets and the increasing appetite for sustainability-linked instruments among both domestic and international investors.
Looking Ahead
KMRC’s planned KSh 3 billion sustainability bond issuance on 28 April 2026 represents another important milestone in the development of Kenya’s green debt market.
By dedicating proceeds to eligible green and social home loans, the company is advancing affordable housing finance while contributing to sustainable development objectives.
Sustainability Bonds Overview
Sustainability bonds meaning
Sustainability bonds are debt instruments that finance both environmental and social projects, such as renewable energy, affordable housing, healthcare, and education.
Sustainability bond example
Examples include bonds issued by the World Bank or African Development Bank to fund climate and social impact projects.
Sustainability bonds vs green bonds
- Green bonds: fund environmental projects only
- Sustainability bonds: fund environmental + social projects
- Social bonds: fund social projects only
Sustainability Bond Principles
These provide voluntary guidelines for issuing sustainability bonds covering use of proceeds, evaluation, management of funds, and reporting.
International Capital Market Association Sustainability Bond Principles
ICMA publishes the global framework used by issuers and investors.
Sustainability-Linked Bond Principles
These apply to bonds where interest rates change based on sustainability targets (e.g., emissions reduction).
Green Bond Principles
These define standards for bonds financing renewable energy, clean transport, water, and climate projects.
