African fintech, The Green Exchange is targeting $5 billion in green bond sales within five years in Nigeria, Ghana, Kenya and others to fund green bonds projects across the continent.
The platform said it aims to be able to make the investment open for investors to trade the debt in a secondary market on projects like wind turbines, electric vehicle charging stations, sustainable housing and solar panel installations which would help to mitigate climate change.
According to Bloomberg, Egypt, Nigeria and South Africa have so far been issuing green bonds in Africa while in other climes, China and Chile have been major sellers.
What they are saying
Orla Enright and Diana Boadu Amoatin, the cofounders of The Green Exchange said they are starting with raising $2 million to build the virtual marketplace by July for both debt and equity fundraising, through crowdfunding on the equity side and green bonds on the debt side.
Enright, its chief executive officer pointed out that Africa has missed out on a global boom in borrowing to fund projects that help mitigate climate change. However, she added that the reaction of companies in the region to issuing corporate green bonds is positive.
According to her, global investment in green bonds is expected to reach $1 trillion by the end of 2022 but the African market contributes only 0.4% of the global market base for green bonds.
Pointing to greater interest by developed nations on climate change and investment funds for developing countries who are already making investments in Africa, she said, “We will be targeting an increasing number of North American and Scandinavian institutional funds incorporating ESG as one of their main criterion of investment,”
While Africa stands at risk from climate change and also suffers from a high cost of finance, Overseas Development Institute said green bonds solutions would help to mobilise $50 billion annually to address these in sub-Saharan Africa.
