The African Development Bank (AfDB) Group has entered into a pact with a coalition of development finance institutions to foster the growth of green bond markets in Africa. Ms. Hassatou N’Sele, AfDB’s Group Vice President and Chief Financial Officer, conveyed this development through a statement released on the bank’s website,leadership reports.
As of 2022, Africa’s participation in the green bond market constitutes less than one percent of the community green bonds exceeding $2.2 trillion issued globally. N’Sele noted that the Global Green Bond Initiative (GGBI) comprises institutions such as the European Investment Bank, European Bank for Reconstruction and Development, Italy’s Cassa Depositi e Prestiti, the Spanish Agency for International Development Cooperation, Green Climate Fund, and Germany’s KfW development bank. PROPARCO of the AFD Group serves as a consortium of European development finance institutions.
The signing of the declaration by AfDB’s Chief Financial Officer took place on the sidelines of the 2023 UN Climate Change Conference (COP28) in Dubai, United Arab Emirates. N’Sele emphasized the intention to leverage the technical assistance program within the Global Green Bond Initiative, announced by European Commission President Ursula von der Leyen in June 2023.
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The initiative aims to facilitate the flow of private capital from institutional investors into climate and environmental projects in EU partner countries, enhancing their access to capital. N’Sele outlined the program’s objectives, including providing technical assistance to green bond issuers in emerging markets and developing economies (EMDEs) and attracting private investors through a dedicated de-risked fund, acting as an anchor investor in green bonds issued in EMDEs.
Anticipating an impact of up to 15-20 billion euros in green investments, N’Sele highlighted the collaboration’s focus on supporting the origination of green bonds, developing and identifying pipelines of green projects, and creating credible and coherent green bond frameworks.
She emphasized the importance of vibrant local capital markets for impactful development in Africa and showcased AfDB’s commitment to the green bond market. In 2022, AfDB issued over $10 billion worth of green and social bonds to support sustainable progress across the continent.
Stefano Signore of the European Commission’s partnerships directorate hailed the partnership with AfDB as a crucial milestone in mobilizing green bonds in emerging developing economies. Additionally, a representative of the Spanish Agency for International Development Cooperation (AECID) expressed optimism that the collaboration would contribute to intensifying climate and environmentally relevant projects, potentially setting off the mobilization of the global green bond initiative.