Climate change is one of the greatest challenges of our time, requiring far more capital than governments alone can provide. Private sources of finance are needed. Tapping into the international capital markets, as well as domestic capital, will be critical.
Green Bonds are one tool that can offer the African capital markets an opportunity to leverage private capital at scale towards building a more climate-resilient, greener economy. Green Bonds have been an effective financial instrument to moving institutional capital to priority economic sectors in the global economy, promoting the development of climate-resilient, low carbon infrastructure that allows for equitable and sustainable development. Globally the green bond market has grown tremendously in recent years, with issuances totalling USD257.7bn in 2019 (CBI, 2020).
In 2020, we partnered with the Climate Bonds Initiative (CBI) to develop a practical guide to issuing green bonds for Africa. This Green Bond Toolkit has been developed to provide the African capital markets with guidance on how to issue green bonds that are in line with international best practices and standards. The Toolkit provides a backdrop to the development of the market and features successful examples of green bond issuances that have emerged out of Africa – such as Acorn Holdings in Kenya and Access Bank in Nigeria.
FSD Africa also supports Green Bond programmes in Nigeria and Kenya, click here to read more.