This report assesses the impacts of green bonds in Africa across capital markets, the environment, and social inclusion.
The report reveals that green bonds have emerged as a promising instrument and could provide practical pathways to finance Africa’s Sustainable Development Goals (SDGs). While still nascent, the continent’s green bond market has demonstrated incremental progress in mobilising financing while enhancing environmental impacts and social co-benefits.
To date, Africa has raised ~USD 9.6 billion through ~76 green bond issuances from ~40 issuing entities. The key to the growth in issuances is adherence to global guidelines and the development of local rules, improving confidence among issuers and investors.
So far, FSD Africa has supported 23 issuances, which will mobilise USD 1.4 billion of sustainable finance in local currency. FSD Africa has provided support through multiple pathways, including facilitating the development of green bond markets, influencing the establishment of guidelines, creating a pool of licensed verifiers to support issuances, connecting prospective issuers to guarantors, and supporting issuers in identifying green projects.
The report reveals that green bond-funded projects have had various environmental benefits across Africa, including a notable reduction in Greenhouse Gas (GHG) emissions, water savings, and improved waste management. Additionally, due to their interlinkages between environmental and social inclusion issues, green bond-funded projects achieve indirect social inclusion benefits, such as job creation.
The report highlights the challenges affecting green bond markets and makes recommendations to address these challenges. Read this report for more insights into Africa’s growing green bond market.
