Tanzania: NMB Jamii bond raise $160mn for social, green projects

Tanzania's NMB Bank PLC has made history by issuing the largest Sustainability Bond ever in the country, raising approximately $160 million through the NMB sustainability bond, known as Jamii Bond. The bond, listed on the Dar es Salaam Stock Exchange, is part of a 10-year multi-currency medium-term program aimed at mobilizing one trillion shillings, equivalent to $400 million. This groundbreaking initiative, launched in September, has garnered significant interest from global investors and is making waves in the sustainable finance sector. Aziz Chacha, the Treasurer at NMB Bank PLC, highlighted the significance of the bond in a recent interview with CNBC Africa. He emphasized that the proceeds from the bond issuance will be directed towards critical areas such as renewable energy, climate adaptation, water waste management, food security, gender equality, education, and health. Chacha also underscored the importance of addressing the gender financing gap, noting that the bank had previously issued a gender bond in 2022 and remains committed to promoting gender equality through its sustainable financing initiatives. The success of the Jamii Bond signals a major milestone for Tanzania and the broader East African region in the realm of sustainable finance. Chacha pointed out that the bond has attracted interest from global investors who are not only focused on financial returns but also on the positive impact that such investments can have on society. By tapping into the global capital market through sustainable instruments, NMB Bank is setting a precedent for other financial institutions in Africa to leverage such funding avenues. Investor appetite for the bond has been strong, with both local and foreign currency tranches oversubscribed, reflecting the growing demand for thematic instruments that support sustainable development goals. Chacha highlighted that the transparency and impact measurement requirements associated with the bond have resonated well with investors, leading to a positive response from the global community. Looking ahead, NMB Bank sees opportunities for further expansion in sectors such as gender finance, affordable housing, and climate finance. The bank is keen on leveraging thematic bonds to address key societal challenges and facilitate capital mobilization for impactful projects. With a growing demand for sustainable bonds globally, NMB Bank aims to continue pioneering innovative financing solutions that align with environmental, social, and governance (ESG) principles. Chacha also addressed the need for more companies to list on the stock markets in East Africa, emphasizing the importance of addressing microstructural and institutional challenges that may hinder market growth. He called for policy interventions to harmonize regulations and enhance liquidity across exchanges, ultimately making it easier for companies to access capital markets. By streamlining regulatory frameworks and promoting investor-friendly policies, Chacha believes that East Africa can attract more issuers and bolster market participation. In conclusion, the success of Tanzania's NMB Jamii bond highlights the growing momentum towards sustainable finance in the region. The issuance of the largest Sustainability Bond in the country underscores NMB Bank's commitment to driving positive impact through responsible financing. As the bank continues to lead by example in the realm of sustainable bonds, it sets a precedent for other financial institutions to embrace ESG principles and contribute to the advancement of sustainable development goals.