Secretary General UNCTAD, Dr. Mukhisa Kituyi
Mr. James Zhan, Director, UNCTAD
Ms. Ligia Noronha, Director UNEP
Sean Kidney, CEO and Co-Founder, Climate Bonds Initiative
Esteemed panelists,
Invited Guests,
Ladies and Gentlemen
Allow me to begin by conveying the apologies of the Cabinet Secretary to the National Treasury, Mr. Henry Rotich who was unfortunately unable to join us for this event. Further allow me to also extend my appreciation to the organisers for requesting me to deliver this key note address given the extremely timely subject of this Executive Dialogue.

It is a pleasure and an honour for Kenya to be hosting UNCTAD 14 and the World Investment Forum 2016. The UNCTAD 14 theme of “From Decisions to Actions” following from the 2030 Agenda for Sustainable Development and the COP 21 commitments on climate change speaks volumes of the challenge we face in aligning the financial markets to sustainable development. Nairobi, given our national Vision 2030 goal of emerging as an International Financial Centre is all the more proud to follow in the footsteps of Accra Ghana, Xiamen China, Doha Qatar and Geneva Switzerland in hosting this World Investment Forum.

Ladies and gentlemen, building on the World Investment Forum 2015 theme of “Reforming International Investment Governance,” our Executive Dialogue today will no doubt have to deliberate on what we actually mean by “Green.” Noting the massive gap in funding needed to support climate change, infrastructure development, economic growth and renewable energy to name but a few, we are faced with the very real tensions over how narrowly or widely to set the definition of what is “green” and by extension what is eligible to be classed as green finance. As a case in point, in a year where China is very much leading from the front as an issuing jurisdiction for Green bonds (accounting for 26% of issuance YTD) there remains division over their inclusion of clean coal and energy efficiency improvements in fossil fuels in their list of green project categories.

Furthermore, 2016 being the biggest year for Green Bond issuance on record, the challenge presented to members of the Sustainable Exchange Initiative (SSE) with regard to the promotion of sustainability reporting, the harmonization of reporting format and the design of sustainability indices appears set to grow exponentially as against the size of the green finance products and issuances. To place this in context, Green bond issuances YTD are up 40% as against 2015 with the market for Green Bonds projected to reach between USD $72 and 75 bln by year end. The proceeds of this financing is currently being put towards renewable energy (47%), buildings (10%), transportation (10%) and energy efficiency (8%). There is therefore little question of the alignment of green finance to the needs of emerging market economies that are engaged in significant investment in energy, commercial and residential real estate and transportation. As the host jurisdiction, in Kenya, the Kenya Electricity Generating Company has just concluded raising a USD $270 million rights issue to support further geothermal and wind energy expansion; we have an ongoing Development Real Estate Investment Trust seeking to raise USD $30 million for a commercial mixed use complex (to say nothing of the myriad cranes you find on every corner of this city), and the Standard Gauge Railway is projected to cost USD $5 billion. In this regard there is certainly no shortage of ongoing investment in sectors that are very amenable to green finance.

As we deliberate on how to create a conducive environment for green finance we must remain conscious that is does not end with green bonds and social & sustainability bonds but extends to greening banking practices, promoting inclusive insurance and leveraging technology to support inclusion, efficiency, transparency and reliability to ensure sustainability of the financial system. This spectrum therefore calls for a great deal of innovation to promote sustainable business practices and responsible investment. Once again turning to Kenya, it is noteworthy that the Kenya Bankers Association, in conjunction with the Central Bank of Kenya has developed Sustainable Banking Principles while the KBA has joined the Sustainable Banking Network. On the other hand, the Nairobi Securities Exchange has become a Sustainable Stock Exchanges Initiative member and has committed to promoting sustainability in the scope of products it introduces as well as raising standards for listed entities on sustainability reporting. The Capital Markets Authority in its own regard took a further step forward with the publication of the Corporate Governance Code for Issuers of Securities to the Public in March of this year which not only sets down clear principles and guidelines around ESG reporting but catered for the development of a Stewardship Code for institutional investors to take on greater responsibility for urging issuers to adopt sustainable business practices and a platform for those institutional investors to make clear public statements on their commitments to responsible investment. It is expected this new Stewardship Code, which received very strong industry support, will come into force in the near future.

With Kenya being at the forefront of innovation and evolution of mobile based financing solutions, we have the opportunity to move beyond the simple pursuit of inclusion with regard to the storage and transmission of money by phone to linking these solutions to facilitating the achievement of the Sustainable Development Goals.

Noting the very rich deliberations that are ahead of us and considering the excellent panel that has been brought together for this Executive Dialogue, I would seek to close my remarks by reemphasizing that the potential to fully leverage green finance is heavily reliant on the effective development and deepening of the capital markets and wider financial sector. To this end, the capital markets industry in Kenya launched a 10 year Capital Markets Master Plan in 2014 which has set down aggressive milestones for market transformation running to the year 2023. It is only through the timely achievement of the reforms relating to market infrastructure; product diversification; the legal, governance and reporting environment and the overall connectivity of the Kenyan markets to the regional and global financial system, that we will be able to reap the fruits of green finance and ensure the markets can play their proper role in funding the Sustainable Development Goals and climate change.

Thank you and once again and as I am sure you have heard many times this week, Karibu Kenya.

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