Cygnum-managed ALCB Fund invests in Kenya Mortgage Refinance Company bond
ALCB Fund backs KMRC’s sustainability bond to support affordable housing in Kenya.
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The African Local Currency Bond Fund (ALCB Fund), managed by Cygnum Capital, has invested KES 624 million ($4.8 million) in a KES 3.0 billion ($23.2 million) bond issuance by the Kenya Mortgage Refinance Company (KMRC).
The bond’s proceeds will be used to refinance eligible green and social mortgage loans in line with KMRC’s Sustainable Finance Framework. Through its refinancing model, KMRC provides long-term local currency funding to primary mortgage lenders, supporting the expansion of affordable housing finance in Kenya.
The eight-year, Kenyan shilling-denominated bond, with a 5.1-year amortising tenor was arranged by NCBA Investment Bank Limited and was listed on the Nairobi Securities Exchange on May 25, 2026.
Fola Pedro, transaction lead at the ALCB Fund, commented: “We are delighted to continue our support for KMRC through participation in its first sustainability bond issuance. The transaction strengthens KMRC’s capacity to extend vital, long-term funding to primary mortgage lenders, supporting the expansion of affordable housing in Kenya. It also marks an important milestone for KMRC and reflects the continued development of Kenya’s local currency bond market, alongside KMRC’s prior issuance of a seven-year bond, with participation from a broad range of institutional investors.”
Johnstone Oltetia, chief executive officer of KMRC, said: “We are pleased to have issued KES 3.0 billion under Tranche 2, Kenya’s first sustainability bond in the domestic capital markets, aligning long-term capital with housing affordability and sustainability. Building on our 2022 inaugural bond, this eight-year sustainability note, with a 5.1-year amortising profile, extends tenor and addresses structural liquidity constraints in housing finance. The longer tenor and amortising structure enable banks and SACCOs to manage asset-liability mismatches and deliver more affordable, longer-tenor mortgages. This instrument deepens capital markets and expands access to affordable, green and social home loans.”
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