According to the Corporate Finance Institute, a green bond is a debt security issued by an organisation or government for the purpose of financing or refinancing projects that contribute positively to the environment and climate.
Similar to conventional bonds, green bonds guarantee to use the revenues to fund or refinance, whole or in part, sustainable projects.
The guideline was launched in a ceremony that was held in Accra and hosted by the SEC.
The Reverend Ogbarmey Tetteh, the Director General of the Security and Exchange Commission(SEC), said the Green Bond Guidelines would provide the required regulatory framework for the issuance of bonds.
He said the regulatory framework provided by the guidelines would boost confidence among asset managers and investors in the credibility of the bonds issued.
“The Green Bond Guideline that we have launched today basically now creates the framework that gives confidence to those who issue the bond and hold the money to be able to channel money to projects that are not only financially viable but also projects that will protect the environment. This is a very important landmark achievement for the investor community in Ghana,” he said.
Mr. Tetteh urged market operators, particularly asset managers and pension fund holders to take advantage of guidelines and create products to advance the capital market.
The Director General emphasised that green bonds would unlock investment potential for Ghana’s environmental sustainability financing.
He said they would provide the necessary funding to finance and support environmentally sustainable initiatives and address the carbon financing gap in the country.
“Essentially, financing is very paramount for every enterprise in the economy of the country. The way to raise the financing is to look for instruments to finance environmental sustainability. We are observing an emerging trend globally for sustainability-backed issuances, and all over the world, green bonds are instruments that raise capital to fund environmental-led initiatives,“ he said.
Mr. Kyle Kelhofer, Senior Country Manager, Ghana Country Cluster, International Financial Corporation (IFC), said the Green Bond Guidelines would promote the role of the financial market in the financing of projects that met the environmental development needs of Ghana.
Additionally, he said the guidelines were intended to support the establishment of a domestic market for green securities, ensure their credibility through transparency and integrity, and prevent the issuance and investment in bonds that were falsely marketed as “green”.
The Country Director emphasised that the Green Bonds Guidelines were a blueprint for linking capital to sustainability, ensuring that investments were not only financially sound but also environmentally responsible.
