Capital Markets
Capital Markets Authority
Fixed Income Securities Market
Kenya
Nairobi Securities Exchange
National Treasury
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US Agency Fannie Mae

CMA Proposes Tax Exemption on Green Bonds to Boost Green Finance in Kenya

Green Bonds have become popular globally with the amount issued standing at $155.5 billion with the US Agency Fannie Mae emerging as the largest issuer.

Kenya’s interest in these bonds aligns with its efforts towards reafforestation, increasing renewable energy supply, and enhancing water and sewage management systems. In addition, Kenya is a signatory of the Paris Climate Agreement which also aligns developing a sustainable environment.

The Capital Markets Authority (CMA) is currently working with the Nairobi Securities Exchange (NSE) and the private sector regarding the issuance of green bonds targeting domestic and foreign investors. Moreover, the Authority has submitted a proposal to the National Treasury regarding tax treatment for green bonds requesting the government to exempt tax on infrastructure bonds which include green bonds.

The proposal also seeks to ask the government to amend the Capital Markets Act to define green bonds which will help the assessment and approval of the green guidelines which will be issued by the NSE.

The NSE has also advocated for the amendment of the listing rules to include “a sub-segment for green bonds within the Fixed Income Securities Market segment.”

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