PRESS RELEASE
CMA to support Nairobi City County Government to issue a green bond
Nairobi, 10 January 2023…The Capital Markets Authority (CMA) today engaged with the Nairobi City County Government (NCCG) to discuss fund raising opportunities through the capital markets, to make Nairobi Africa’s capital.
The NCCG Governor H.E. Sakaja Arthur Johnson explained that he would source for long-term financing to meet the development needs of the County through the issuance and listing of a green bond and the potential listing of County agencies such as Nairobi Water and Sewerage Company. ‘We need about Kshs17 billion to address the sewerage situation and expand the water pipes to meet Nairobi’s growing population. The County cannot raise these funds from conventional sources such as banks or even from its own revenue thus, the capital markets offer an affordable and long-term solution’, said Hon. Sakaja.
County financing through the capital markets has been one of the Authority’s key priorities as outlined in the 10-year Capital Market Master Plan which envisions that 30 percent of financing for counties will be drawn from the capital markets. ‘The Authority will support the NCCG to raise funds through the capital markets. However, it will be important for the County to demonstrate good governance through the prudent application of funds raised, to give confidence to investors for future county capital raising exercises’, CMA Chief Executive Officer Wyckliffe Shamiah noted. The Governor observed that his present focus was to lay the groundwork for the fundraising by addressing the financial status of NCCG, its pending bills and credit rating, to attract investment capital.
Noting Nairobi’s favourable geographical position to Africa, Europe and North America, the Governor further underscored his commitment to address transit challenges in the city which is likely to result in decongestion, improved urban planning and cost as well as time savings, considering that the average daily commute within Nairobi was four hours, whereas a flight to any hub in Europe was eight hours.
The two parties agreed to form a committee that will action the opportunities in the capital markets swiftly. CMA will lead engagement with all stakeholders, including where possible, a push for changes to policies and laws to enable counties to borrow above the current limit of 20 percent of their audited annual revenues, for development projects.
ENDS
BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY
The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Manager, Corporate Affairs & International Relations on This email address is being protected from spambots. You need JavaScript enabled to view it.
