Shelter Afrique to float Sh65bn sustainability-linked bond for East African housing in Q1 2027
Written on
Shelter Afrique plans to issue a $500 million (Sh64.83 billion) sustainability-linked bond focused on East Africa in the first quarter of 2027, with the bulk of it to be listed on the Nairobi Securities Exchange.
Housing-focused Pan-African multilateral development bank Shelter Afrique plans to issue a $500 million (Sh64.83 billion) sustainability-linked bond focused on East Africa in the first quarter of 2027, with the proceeds aimed at financing housing projects across the region.
The institution's Managing Director and Chief Executive Officer, Thierno Habib Hann, said the bank is targeting four markets with the issuance. "We plan to go to market and issue US$500 million worth of local currency sustainability linked bond in East Africa in early 2027 and we are targeting four markets - Kenya, Uganda, Tanzania and Rwanda," he said. According to the CEO, the lion's share of the bond will be floated on the Nairobi Securities Exchange owing to the size and depth of liquidity in the market.
Hann said Shelter Afrique is also in the market in West Africa, where it is issuing about 60 billion CFA francs within the monetary union to finance housing projects in local currency. The West and East Africa bonds are designed to shield the implementation of housing projects in the two regions from the foreign currency risk associated with borrowing in hard currency.
"One major risk is currency risk, and that is why we must mobilise resources through our local markets," Hann said, noting that currency depreciation over the life of a project can erode returns. Shelter Afrique had earlier said proceeds from the bonds would be invested in Kenya, Rwanda, Uganda and Tanzania, and it holds housing projects and investments in mortgage refinance companies in multiple African markets.
The development bank last issued a bond in Kenya in 2013, a five-year note of Sh5 billion at an interest rate of 12.75 per cent. Shelter Afrique, which closed 2025 with a strengthened balance sheet, has 44 member countries. Nigeria is the largest shareholder with a 17.01 per cent stake, followed by Kenya with 15.81 per cent, while the African Development Bank and the African Reinsurance Corporation hold 11.41 per cent and 3.3 per cent respectively.
A sustainability-linked bond is a type of bond in which the issuer commits to measurable sustainability targets, with the cost or terms of the financing linked to performance against those objectives.