ESG bonds (sustainable development bonds) are increasingly gaining popularity in the market, providing investors with a new type of instruments aimed at solving environmental and social problems.
The Asian Development Bank (ADB) entered the Kazakhstan Stock Exchange with it debut green bond issue in November 2020, where Tengri Partners Investment Banking (Kazakhstan) JSC (“Tengri Partners”) acted as a sole arranger. ADB tapped the market with two medium-term notes in the total amount of almost KZT14bn ($32m). The proceeds went to the projects aimed at lowering or eliminating greenhouse gas emissions into the atmosphere, as well as lowering the vulnerability of anthropogenic or natural systems to the consequences of climate change and enhancing resilience and adaptability.
On the Kazakhstani market, ADB has pioneered the issuance of social bonds, namely gender bonds, aimed at achieving gender equality and promoting women’s empowerment. Tengri Partners participated in this deal as a sole arranger placing KZT8.4bn (about $20m) worth ADB bonds on KASE. Proceeds were directed to the project which focuses on increasing the lending operations of the “Otbasy Bank” House Construction Savings Bank” JSC and promoting affordable residential mortgage loans for female borrowers in predominantly rural regions.
Overall, the ESG bond market in Kazakhstan today amounts to KZT79 bn (about $168m) which already exhibits good opportunities for the development and stimulation of sustainable financing in the region. This type of bonds provides investors with the opportunity to finance sustainable projects on attractive terms, strengthen the corporate image and expand the client base.