Country: Ghana

Ghana Stock Exchange launches Green Bond Rules at its 32nd anniversary celebration

Posted on by TIMOTHYRADIER

As part of programs to mark its 32nd anniversary, the Ghana Stock Exchange (GSE) in collaboration with its regulator, the Securities and Exchange, launched the new Green and Sustainable Bond Rules to guide the listing and trading of green and sustainable bonds on the Ghanaian market.

This year’s anniversary was under the theme “Investing into a Green and Sustainable Future’.

Green Bonds are bonds that support new or existing projects that generate climate or other environmental benefits that conform to Green Guidelines and Standards while Sustainable bonds support new or existing projects that generate both environmental and social benefits that conform to the Sustainability Guidelines.

The first Green Bond was issued in 2007 by the European Investment Bank under the label Climate Awareness Bond. Due to the role the finance sector plays in allocating capital efficiently, it remains a key channel for economies all over the world to make a real impact. As such, the best way to combat climate change while still making a profit is through the financial market.

In his remarks, the keynote speaker for the event, Mr. Aliou Maiga, IFC’s Regional Industry Director for the Financial Institutions Group in Africa said, “I commend Ghana and the Ghana Stock Exchange for showing leadership in green and sustainability finance. Climate financing is not only a development imperative but also a significant market opportunity.

IFC is committed to working with Ghana’s stakeholders to facilitate investments that reduce greenhouse gas emissions and support climate change adaptation.”
Speaking at the event, the Director General of the Securities and Exchange Commission stated that “Investing in green and sustainable future is both well timed and opportune.

Sustainability is a broader topic that stands on social human, economic and environmental pillars, none of which can be ignored. It is the most pressing challenge of our time for many business leaders. However, there is evidence of a correlation between the long-term success of a business and sustainability. Investors across the world are demanding opportunities to invest in companies or investments with strong ESG markets.”

Delivering his goodwill message at the event, the Senior Financial Markets Specialist at FSD Africa, Victor Nkiiri hinted that “At Financial Sector Deepening Africa (FSD Africa), we see the development of capital markets to an end, to increase income and job creation, access to basic services and building of sustainable futures. Deep liquid markets are fundamental to economic growth because they help channel longer-term domestic savings of an economy to the most productive use.”

In his remarks, the Managing Director of GSE, Ekow Afedzie said, “Green and Sustainable bonds have gained traction globally due to the enormous benefits it brings to the environment and society at large.” GSE has been very committed to sustainability initiatives over the past years culminating in our recent admission to the UN Sustainable Exchanges in July.

The launch of ESG Disclosure Manual Guidelines in November this year is another testament to our commitment to this sustainability journey. The launching of Green and Sustainable bond rules today is another milestone on our sustainability journey. Listed companies in Ghana now can tap into these fast-growing bond investment products to raise capital that can be used in supporting ESG initiatives.

Read original article

Leveraging the African insurance industry to create resilient African economies

Posted on by TIMOTHYRADIER
Speakers
Mr. Babajide Sanwo-Olu, Governor of Lagos State
Dr. Mahmoud Mohieldin, High Level Climate Champion
Hon. Bogolo J Kenewendo, Africa Director, High Level Climate Champions
Dorothy Maseke, Group Head of Risk and Compliance ICEA Lion Group 
Kelvin Massingham, Director – Risk and Resilience – FSD Africa
Lesley Ndlovu, CEO – African Risk Capacity
Patty Karuihe-Martin, CEO – Namib Re
Philip Lopokoiyit, Group CEO – ICEA LION Group

Africa insurance industry to underwrite $14bn of cover for climate risks by 2030

9 November 2022, Sharm El Sheikh – The Nairobi Declaration on Sustainable Insurance (NDSI) signatories have today announced a first-ever financial commitment by the African insurance industry to underwrite $14 billion of cover for Africa’s climate risks by 2030.

The announcement was made at COP27 side event: “Leveraging the African insurance industry to create resilient African economies.” Moderated by Hon. Bogolo Kenewendo, Africa Director and Special Advisor, High-Level Climate Action Champions, the session highlighted the critical role of the African insurance industry in creating climate resilience for the continent.

This commitment comes as Africa continues to face irreversible loss and damage associated with global climate change impacts such as drought, flood and tropical cyclones.  With African nations among the most exposed globally to the impacts of climate change and nature loss, Africa cannot continue to rely on international aid and developed world climate finance commitments to respond to climate catastrophes.

Local, market-based disaster risk finance solutions must be developed and scaled, including risk transfer solutions such as insurance, as these are critical tools in ensuring resilience. In particular, the leverage and immediate deployment of capital that insurance capital allows need to be further utilised.

It is in response to this that the 85+ NDSI signatories are announcing the creation of the African Climate Risk Facility, which will take a targeted approach to respond to climate risk. Through this facility they are committing to underwrite $14bn of cover for climate risks by 2030 to protect 1.4 billion people against floods, droughts, and tropical cyclones.

The Africa Climate Risk Facility is a mechanism that will scale private sector underwriting of climate disaster risk in Africa. It will facilitate the uptake of climate risk insurance by African sovereigns, cities humanitarian organisations and NGO’s to help African countries better manage the financial impacts of climate shocks and increase the resilience of the most vulnerable communities. The Facility will include a donor-funded Trust Fund that provides premium subsidies, product development technical assistance and policyholder capacity building. The governance of the Trust Fund will be designed to allow swift response to opportunities.

Kelvin Massingham, Director Risk and Resilience, FSD Africa said: “Mainstreaming resilience into Africa’s economic development is essential to secure future prosperity and sustainable growth. Now is the time for the African insurance sector to play the significant role it should in creating this resilience. The Nairobi Declaration on Sustainable Insurance’s proactive and market-based approach is exactly what we need, and the commitment today is a strong statement to work together to provide an African-led solution to loss and damage.”

Patty Karuihe-Martin, CEO Namib Re commented: “Irreversible Loss or Damage refers to the calamitous impacts of climate change that cannot be circumvented by mitigation and adaptation alone. So apart from managing risk, crafting affordable risk transfer and risk sharing solutions through compliant, trusted and responsive Insurance and Reinsurance for such loss or damage for the developing countries is a crucial discussion; if not for unfailing and guaranteed resilience then at least to allow for decent work and dignified life to continue.”

Phillip Lopokoiyit, Group CEO, ICEA LION Group said: “As private sector insurers, we have a key role to play in ensuring a sustainable future. Our priority lies in providing solutions that will support the resilience of our clients in light of the greatest challenge facing humanity. Coming together as signatories to support the set-up of the Africa Climate Risk Facility, will provide the necessary capacity needed by insurers to the solutions that will respond to climate risk. The commitment that we have made, as signatories, to underwrite $14 billion of cover for climate risks by 2030, will protect 1.4 billion people against floods, droughts, and tropical cyclones.This is indeed a testament of our quest to ensure that we contribute to the long term sustainability and economic resilience of our countries.“

About the Nairobi Declaration on Sustainable Insurance:

Launched in April 2021, The Nairobi Declaration on Sustainable Insurance is the declaration of commitment by African insurance industry leaders to support the achievement of the UN Sustainable Development Goals (UN SDGs). Accredited by the United Nations Environment Programme, Principles for Sustainable Insurance (UNEP PSI) and with over 85 signatories, it is promoting action by the African insurance sector towards sustainability goals.

This Africa focussed initiative was designed to encourage and support the African insurance market players to commit to sustainable insurance practices. It is also a convening platform for a united African voice on the global stage on climate change issues affecting the continent and the insurance sector.

The Nairobi Declaration on Sustainable Insurance is an alliance of senior leaders in Africa’s insurance ecosystem who are committed to accelerate solutions to major sustainability challenges – ranging from climate change and ecosystem degradation to poverty and social inequality – particularly in a post-Covid-19 world.

To date, more than 85 insurers, reinsurers and brokers have signed the Declaration and committed to the five key areas including risk management; insurance; investment; policy, regulatory and industry engagement; and sustainable insurance thinking and practices.

For further details on the Nairobi Declaration on Sustainable Insurance or any interview requests, please contact:

FSD Africa 

Nelson Karanja

Director, Communications & Engagement

FSD Africa

nelson@fsdafrica.org

African insurers take up climate change fight with $14 bln pledge

Posted on by TIMOTHYRADIER

Summary

  • 85 insurers make pledge to extend climate cover
  • Comes as COP27 talks focus on issue of loss & damage
  • African Climate Risk Facility to cover 1.4 bln people

SHARM EL-SHEIKH, Nov 9 (Reuters) – A group of over 85 insurers in Africa has pledged to create a financing facility to provide $14 billion of cover to help the continent’s most vulnerable communities deal with climate disaster risks such as floods and droughts.

The commitment to create the African Climate Risk Facility (ACRF) was made on Wednesday during the COP27 climate talks comes as developing countries push their richer peers to do more to help them pay for the costs of responding to such events.

Demand for compensation for the “loss and damage” caused by global warming has long been rejected by wealthy countries, whose leaders are wary of accepting liability for the emissions driving climate change.

Africa, which accounts for less than 4% of greenhouse gas emissions, has long been expected to be severely impacted by climate change.

Against that backdrop, the African insurance plan is based around creating a scalable, local market-based funding tool to help countries better manage the financial risk of climate shocks and increase the resilience of its more vulnerable communities, the group said in a statement.

“This is the African insurance industry saying let’s come together and try and solve this ourselves,” said Kelvin Massingham, director risk and resilience at FSD Africa, one of the partners behind the launch.

“We have a massive risk gap in Africa and existing solutions aren’t working,” Massingham said. FSD Africa is a UK government-backed development group.

The ACRF will provide protection for 1.4 billion people against floods, droughts and tropical cyclones by providing $14 billion of climate risk insurance by 2030 to African sovereigns, cities, humanitarian organisations and NGOs, the insurers said.

The group is calling for $900 million in funding from development partners and philanthropies to support the project, much of which will go towards providing a subsidy on the cost of the premium to help governments and cities with limited fiscal resources buy the cover.

These donor funds will be held in a trust and managed by the African Development Bank.

“The facility will enable us to cover certain risks like floods, cyclones and droughts…and to help us mitigate the risks we face as underwriters dealing with these climate risks,” said Philip Lopokoiyit, chief executive at Nairobi-based insurer ICEA LION Group.

The insurance commitment is the first from the 85 signatories of the Nairobi Declaration on Sustainable Insurance, signed in April 2021 by the industry to support the U.N. Sustainable Development Goals.

The ACRF will provide a domestically funded alternative to global initiatives like the World Bank’s Global Risk Financing Facility and the Global Shield Financing Facility, a new funding facility that will help countries that suffer heavy economic loss due to climate change-driven disasters, announced by World Bank president David Malpass on Tuesday.

Read original article

Climate finance innovation for Africa

The African continent presents a massive investment opportunity for investors to advance climate solutions in the coming decade, however, a set of barriers to finance have stifled requisite investment to date. In this new report, in collaboration with Climate Finance Innovation for Africa and Climate Policy Initiative, we provide a framework for how innovation in financing structures can leverage strategic deployment of public capital to ‘crowd-in’ private investment at levels not yet seen.

This paper focuses primarily on climate mitigation, which represents the largest investment opportunity for private investors. We refer audiences focused specifically on adaptation to the work done by the Global Center on Adaptation and Climate Policy Initiative on Financial Innovation for Climate Adaptation in Africa.

Private debt markets in Africa

We engaged Lion’s Head Global Partners to conduct a study on Private Debt markets in Africa. While keeping a pan-African perspective, the study focussed on Nigeria, Kenya, Ghana, and Morocco as markets of strategic importance. South Africa was used as a reference market, given the development of the financial sector and the size and scale of the South African institutional investor base.

In addition to desk research and data analysis, the outputs, analysis, and recommendations were driven by stakeholder consultations, workshops, and interviews to both reflect individual positions, but also generate buy-in from stakeholders.

The insights from the study will support FSD Africa’s overarching strategic goal to mobilise long-term finance in local currency to support Africa’s development priorities and inform our transaction support, regulatory initiatives and knowledge and capacity-building engagements under its Africa Private Equity and Private Debt programme. The study will also benefit stakeholders including institutional investors, borrowers, regulators and policymakers, who seek to improve the enabling environment.

FSD Africa Impact Report – 2022

FSD Africa is a specialist development agency working to make finance work for Africa’s future. Set up in 2012, we work on policy and regulatory reform, capacity strengthening and improving financial infrastructure, and addressing systemic challenges in financial markets to spark large-scale and long-term change.

Additionally, we provide risk capital by investing in cutting-edge ideas that we believe have the potential for significant impact. We take on projects that are more complex and riskier than those taken on by typical development finance firms, to unlock additional funding for innovative sectors.

Over the past decade, we’ve seen that investing in financial markets drives economic growth, boosts the income of vulnerable groups and helps to reduce poverty. Through our market-building initiatives, we have directly and indirectly crowded in around £1.9 billion in long-term capital, availing finance for SMEs, affordable housing and sustainable energy projects.

Our work has also enabled development of innovative products, increasing access to financial services for close to 12 million people in Africa. This improved access has been particularly beneficial during the Covid-19 crisis. Between 2020 and 2021, we saw an 87% increase in the use of remittance services to cushion families from the economic effects of the pandemic.

Our programmes have also supported business growth, increasing access to jobs for vulnerable groups such as women. To date, we have created or sustained approximately 67,200 full-time equivalent (FTE) jobs, of which 12% were green jobs and 59% were occupied by women.

Results against five-year targets

The figure below shows our cumulative results against the five-year targets for each of our core indicators.

Impact over 5 years