Acorn Holdings Limited (AHL) is on track to repay the Acorn Green Bond Medium Term Note, amounting to Sh5.7 billion, ahead of its official maturity date of November 8, 2024. A balance of up to Sh2.7 billion will be repaid to bondholders along with accrued interest in the first week of October 2024.
This Green Bond program, launched in 2020, was notable as Africa’s first Green Housing Bond and the first to be cross-listed on both the International Securities Market (ISM) of the London Stock Exchange (LSE) and the Nairobi Securities Exchange (NSE). The funds raised were dedicated to developing safe, affordable, and environmentally friendly purpose-built student accommodation (PBSA) for university students.
The decision for early redemption underscores AHL’s financial prudence and the strength of its underlying portfolio, which has allowed it to meet its investor obligations. The bond was partially guaranteed by GuarantCo, with AHL providing a corporate guarantee as well.
Initially issued before the COVID-19 pandemic in 2019, the bond reinvigorated Kenya’s corporate bond market and facilitated the development of certified green assets in the region. It also encouraged co-investment, raising over Sh5.5 billion from local pension funds through the ASA REITs.
Internally, the bond catalyzed further investment into the PBSA portfolio, including a Sh6.7 billion green facility from ABSA and an additional USD 180 million from the United States Department of Finance Corporation.
Currently, the bond is part of the funding mechanism for the Acorn Student Accommodation Development REIT (ASA D-REIT), financing the development of six PBSA assets with a capacity of up to 7,000 beds. Notably, the largest properties, Ǫwetu and Ǫejani Chiromo, opened in August 2024, collectively offering more than 2,500 beds.
All projects have been completed, with four transferred to the I-REIT and two undergoing stabilization. Acorn has successfully refinanced the bond to support stabilization efforts before transitioning into the I-REIT.
The Acorn Green Bond has made significant contributions beyond improving student housing. It has created over 2,000 direct jobs, more than 7,000 indirect jobs, and induced over 10,000 additional jobs in the local economy. The bond has also stimulated the local supply chain within the construction industry and enhanced access to credit for small and female-owned SMEs.
In terms of sustainability, the bond has facilitated the development of green assets with on-site renewable energy installations, effectively reducing the carbon footprint of the projects. The properties are strategically located within walking distance of universities, which helps lower greenhouse gas emissions.
Recognition for these achievements includes acknowledgment from the Climate Bonds Initiative, with all developments being IFC EDGE certified and the funds receiving GRESB 4-star certification. Acorn Holdings Limited has also been honored by the IFC as an EDGE Champion in Africa for its dedication to sustainability and green development.
Additionally, the Green Bond was oversubscribed during its upsizing in 2021, and investors have received over Sh1.4 billion in coupon payments to date, alongside the principal.
