Green Bonds have become a key tool in Ghana’s strategy to meet its Sustainable Development Goals and address climate change. In March 2024, the Securities and Exchange Commission introduced guidelines for issuing Green Bonds, ensuring compliance with international standards. These bonds finance projects like renewable energy, pollution control, and biodiversity conservation.
Sustainable Development Goal (SDG) 13 requires that urgent action is taken to combat climate change and its impacts. Stemming from this, countries are taking positive steps to ensure that the set Target is achieved, and the SDG is met by the 2030 deadline. Over the years, there has been increased investments in green initiatives and Ghana has been taking concrete steps to tap into this new area and to most importantly, meet its SDG goal.
To encourage the financing and undertaking of green projects, the Ghana Fixed Income Market (GFIM) in April 2022, issued guidelines (GFIM Rules) for the issuance of sustainability bonds. These sustainability bonds include Social Bonds, Gender Bonds, Green Bonds, Sustainability Bonds, Sustainability-Linked Bonds (SLB’s) and other Sustainability-themed Bonds.
This write-up seeks to highlight the key pre-issuance and post-issuance requirements under the SEC Guidelines for the issuance of Green Bonds in Ghana
The Securities and Exchange Commission of Ghana (the “Commission”) issued guidelines on the issuance of Green Bonds (the “SEC Guidelines”) on 7th March 2024.1 The SEC Guidelines have been formulated in line with the Green Bond Principles of the International Capital Market Association (“ICMA”). The SEC Guidelines serve as a blueprint for the issuance of Green Bonds in Ghana and sets out the aim of the guidelines, the application process, required documentation, and post-issuance requirements.
Green Bonds, like traditional bonds, are a form of loan made by an investor to a borrower at a fixed or variable interest rate and have a maturity date. The distinct nature of Green Bonds is that the proceeds derived from their issue are exclusively used to finance or re-finance sustainability-focused projects.
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