Africa Green Bond Toolkit – A practical guide to issuing green bonds for Africa

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Green Bonds generate financing for projects in renewable energy, energy efciency, sustainable housing and other eco-friendly industries. They tap the vast pools of financing—the trillions of dollars held by institutional investors such as pension funds, insurance companies and sovereign wealth funds—available in domestic and global capital markets. These investors are looking for climate-smart initiatives that make good business sense: opportunities that carry the right risk-reward profiles and meet investor-specific criteria for rating, tenor, yield and geographic diversity.

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The goal of the green bond market is to promote and amplify the important role that financial markets can play in helping to address the global climate change crisis. By explicitly specifying the environmentally beneficial projects to which the bond proceeds are allocated, Green Bonds allow investors to assess and allocate capital to environmentally sustainable investments. This Green Bond Tool Kit has been developed to provide the African capital markets with the guidance on how to issue green bonds that are in line with international best practices and standards. It provides a backdrop to the development of the market and features successful examples of green bond issuances that have emerged out of Africa. The Tool Kit sets out guidance on the process that issuers and verifier firms are expected to adhere to when issuing a green bond.