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. A sustainability-linked bond is a type of bond in which the issuer’s financial or structural terms change based on whether it reaches specific environmental, social, or governance goals. Shelter Afrique said the multi-currency bond will be floated in Kenya, Uganda, Tanzania, and Rwanda.
‘We are in the space of mobilising resources from our local markets. We are currently in the market in West Africa where we are issuing about 60 billion CFA francs in the monetary union to finance housing projects in local currency,’ Shelter Afrique MD and CEO, Thierno-Habib Hann, said while speaking at the second Bullish Africa Summit in New York.
‘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.’
According to the CEO, the lion’s share of the planned sustainability-linked bond will be floated on the Nairobi Securities Exchange owing to the size and depth of liquidity in the market.
Shelter Afrique had earlier said that proceeds from the bonds would be invested in Kenya, Rwanda, Uganda, and Tanzania. The institution has housing projects and investments in mortgage refinance companies in multiple African markets.
Shelter Afrique last issued a bond in Kenya in 2013, a five-year note of Sh5 billion at an interest rate of 12.75 percent.
Shelter Afrique says that the West and East Africa bonds are designed to ensure that the implementation of housing projects in the two regions is shielded from 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. You can have an amazing project that offers you huge returns, but if your local currency depreciates over the life of the project, that can really eat into your return and potentially push the project to default,’ Hann said.
Foreign currency risk in debt occurs when a borrower takes out a loan denominated in a currency different from their home currency, meaning a drop in the value of the borrower’s local currency makes the debt much harder to repay. Shelter Afrique closed 2025 with a $234.82 million (Sh30.44billion) asset base, of which $174.08million (Sh22.57billion) was attributable to loans disbursed to customers, having grown from $134.7 million (Sh17.46billion) a year earlier.
The development bank has 44 member countries, with Nigeria as the largest shareholder with a 17.01 percent stake. Kenya has a 15.81 percent stake in the bank, while the African Development Bank and the African Reinsurance Corporation hold 11.41 percent and 3.39 percent stakes, respectively.