The Shariah-compliant bond named ‘Linzi Sukuk’ will offer an internal return of 11.13 percent and will be used to develop 3,069 housing units.

Also known as Islamic bonds, sukuk are financial instruments that comply with the Shari’ah principles.

“We are thrilled to embark on this pioneering journey with the issuance of the first Sukuk bond,” CMA CEO Wyckliffe Shamiah said.

“This financial initiative represents not only a new investment opportunity but also a significant step towards addressing the housing deficit in Kenya and supporting the Government’s transformative agenda,” he added.

The approval now offers investors investment options.

CMA says that the issuance of the bond underscores Kenya’s commitment to address the pressing need for affordable housing through cheap financing.

The housing demand in Kenya is estimated at 250,000 units annually.

With a supply of only 50,000 new houses per year, there is an 80 percent annual housing deficit.

The government has a plan to deliver 200,000 housing units annually through collaboration between the national government, counties, and the private sector.

To this end, there have been at least three projects launched in the past three months, with 7,800 units in the offing.