CRDB Bank achieved a significant milestone on Thursday as it received approval from the Capital Markets and Securities Authority (CMSA) to launch the first-ever multicurrency green bond in Tanzania, making it the largest issuance of its kind in Sub-Saharan Africa.
This corporate bond, valued at a whopping 300 million US dollars (equivalent to 780 billion Tanzanian shillings), stands as a testament to CRDB Bank’s commitment to green financing. It follows closely on the heels of NBC Bank’s recent 300 billion Tanzanian shilling issuance, marking a period of robust growth in Tanzania’s capital markets. The CRDB bond will be dual-listed on the Dar es Salaam and London stock exchanges, opening up new avenues for international investment.
The CMSA granted its approval after CRDB Bank demonstrated compliance with the Capital Markets and Securities Act Chapter 79 of the Laws of Tanzania, which governs the issuance of corporate bonds. Additionally, CRDB Bank adhered to the stringent guidelines set forth by the International Capital Markets Association (ICMA), further reinforcing its commitment to environmentally and socially responsible projects.
Dubbed the ‘Kijani Bond,’ a nod to CRDB Bank’s corporate color, this initiative aligns with the government’s ongoing efforts to leverage the financial sector for sustainable development activities. The bond’s launch coincides with its opening for subscription, spanning from August 31 to October 6, 2023. During this initial phase, CRDB Bank aims to raise 40 billion Tanzanian shillings, with a green shoe option of up to 15 billion Tanzanian shillings, reflecting strong investor confidence in this innovative financial instrument. The Kijani Bond launch signifies a historic moment, as CRDB Bank introduces the largest green bond not only in Tanzania but across the entire Sub-Saharan African region.
CRDB Bank, the country’s largest lender, has outlined plans to issue up to $300 million in notes, earmarked for climate-friendly initiatives. This issuance marks Tanzania’s maiden foray into the green debt market. The bank’s Managing Director, Abdulmajid Nsekela, stated that the first tranche aims to raise 55 billion Tanzanian shillings (equivalent to $22 million). Interested investors can subscribe to the first tranche from August 31 to October 6, with the bond offering an attractive interest rate of 10.25%. The bond will be traded on both the Dar es Salaam Stock Exchange and the London Stock Exchange.
Notably, the minimum purchase amount for interested investors begins at 500,000 Tanzanian shillings, ensuring accessibility to a broad range of stakeholders.
Nicodemus Mkama, CEO of the Tanzania Capital Market and Securities Authority (CMSA), commended CRDB Bank for achieving this historic milestone and emphasized the green bond’s alignment with international standards. Mr. Mkama stated, “We expect that Kijani Bond will be instrumental in further developing green financing in Tanzania.” CMSA’s endorsement underscores its confidence in CRDB Bank’s commitment to sustainable financing, paving the way for substantial growth in climate financing.
The Kijani Bond has garnered global attention, with the International Finance Corporation (IFC), a member of the World Bank Group, expressing its intent to invest 40% of the total issuance, totaling $300 million.
Individuals interested in investing in the Green Bond can visit any CRDB Bank branch or an authorized broker. Investment forms can be accessed on CRDB Bank’s official website (www.crdbbank.co.tz), and inquiries can be directed to the Customer Service Center via the toll-free number 0800008000.
The launch of the Kijani Bond underscores CRDB Bank’s unwavering dedication to environmental, social, and governance (ESG) principles, further solidifying its role as a key player in the realm of green finance. With a history of sustainable initiatives and recognition from the United Nations Green Climate Fund (GCF), CRDB Bank continues to lead the way in promoting green financial solutions.
Photo Source: Google
3rd September,2023
Delino Gayweh
Serrari Financial Analyst
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