By Brian Nkiwane
The Zimbabwe Stock Exchange (ZSE) has embarked on a mission to consult stakeholders on the imminent introduction of Green and Social Bonds on the local bourse with a vision to raise funds for clean, sustainable projects.
A Green Bond is a debt instrument in which a third party has certified that the proceeds will be used only for clean projects and similarly a Social Bond will serve the purpose of bankrolling social development projects.
In a statement, ZSE chief executive officer, Justin Bgoni, said the initiative will offer investors a wider variety of investment instruments.
“As part of the efforts by the Zimbabwe Stock Exchange Limited to encourage sustainability and offer investors a wider variety of investment instruments, the ZSE has commenced work on guiding principles for the issuance of Green and Social Bonds in Zimbabwe.
The ZSE has drafted a Green and Social Bonds Framework which is meant to act as a guide on the operational regulatory environment on Green and Social Bonds in Zimbabwe and the procedure for listing and trading of Green and Social Bonds.”
He added: “ZSE believes it is important to facilitate offerings and listings by continually enhancing its rules to accommodate new products and services. It is to this end that the ZSE is seeking comments from stakeholders on the proposed Green and Social Bonds Framework. The closing date for receiving comments is 30 November, 2019 and a soft copy of the draft Green and Social Bond Framework is available on our website”.
The development comes at a time the country has failed to attract sufficient investment into clean projects such as renewable energy production in the form of solar and hydro, and also in social infrastructure and development.
“That’s a welcome initiative and that is part of global thrust were globally most investors are mainstreaming social and environmental safeguards. The focus is now on the maintenance of the environment, so the thrust is on the green economy. In whatever we do, let’s think the environment and let’s also go further and do natural resource accounting, to see the value that we get from the environment,” Environmental Management Agency spokesperson, Steady Kangata said.
The Green bond market has seen tremendous growth globally in recent years as investors are keen on bankrolling projects that pursue the green economy.
Analysts have welcomed the ZSE initiative going into the future. In 2019, two Indian companies, Greenko and Adani Green entered into the international market for green bonds to raise US $950 million and US $500 million, respectively. In September 2018, the State Bank of India raised US$650 million through a green bond issue.
Adopting green technologies is expected to contribute not only to lowering carbon emissions, but improvement in national energy production and security, employment creation, access to energy, poverty reduction and improved livelihoods without adverse effects on the climate.