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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenya’s pension industry eyes green
bonds to diversify revenue streams

NAIROBI (Xinhua) -- Kenya’s pension industry is seeking to invest in green bonds in order to diversify its revenue streams, the industry regulator said on Tuesday.

Retirement Benefits Authority (RBA) Acting CEO Nzomo Mutuku told Xinhua in Nairobi that pension assets hit ten billion U.S. dollars by the end of 2017.

“We are looking forward to the introduction of the green bond asset class so that we can diversify our portfolio to include environmentally friendly assets,” Mutuku said.

The Nairobi Securities Exchange and the Capital Market Authority have already issued guidelines for green bonds and the first bond is expected to be issued before the end of the year.

According to the RBA, public workers currently hold retirement assets worth eight billion dollars while the private sector has two billion dollars under management.

Mutuku said the pension industry is being lured to invest in green bonds due to expected huge returns.

The government plans to offer tax incentives to investors who purchase green bonds through exempting interest income from taxation.

Mutuku said currently pension assets are invested in government securities, corporate bonds, equities and the real estate sector.

He noted that green bonds are set to be a huge industry due to the abundant sources of renewable energy in the country.

The pension regulator noted that Kenya’s pension assets are still relatively small as compared to the size of the labor force due to the country’s low savings rate.

           

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