SEC launches Green Bond guidelines to boost sustainable investments in Ghana

The Securities and Exchange Commission (SEC) has introduced pioneering Green Bond Guidelines to regulate the issuance of green bonds in Ghana. A green bond, as defined by the Corporate Finance Institute, is a debt security issued by an organization or government to finance or refinance projects that positively impact the environment and climate. Like conventional bonds, green bonds ensure that the funds raised are directed towards sustainable projects.

The guidelines were unveiled at a ceremony in Accra, hosted by the SEC. Reverend Ogbarmey Tetteh, the Director General of the SEC, highlighted the significance of these guidelines in providing a robust regulatory framework for green bond issuance. He emphasized that the guidelines would enhance confidence among asset managers and investors regarding the credibility of the bonds issued.

“The Green Bond Guidelines we have launched today create a framework that assures those issuing the bonds and managing the funds can channel money into projects that are not only financially viable but also environmentally beneficial. This is a landmark achievement for the investor community in Ghana,” Reverend Tetteh stated.

He encouraged market operators, particularly asset managers and pension fund holders, to leverage the guidelines to develop products that advance the capital market. Reverend Tetteh underscored that green bonds would unlock investment potential for Ghana’s environmental sustainability financing, providing essential funding for environmentally sustainable initiatives and addressing the carbon financing gap in the country.

“Financing is crucial for every enterprise in our economy. To raise financing, we must seek instruments that support environmental sustainability. Globally, there is an emerging trend towards sustainability-backed issuances, and green bonds are instrumental in raising capital for environmental initiatives,” he added.

Mr. Kyle Kelhofer, Senior Country Manager for Ghana Country Cluster at the International Financial Corporation (IFC), echoed the importance of the Green Bond Guidelines in promoting the financial market’s role in funding projects that meet Ghana’s environmental development needs. He noted that the guidelines aim to establish a domestic market for green securities, ensuring their credibility through transparency and integrity, and preventing the issuance and investment in bonds falsely marketed as “green.”

Mr. Kelhofer emphasized that the Green Bond Guidelines serve as a blueprint for linking capital to sustainability, ensuring that investments are not only financially sound but also environmentally responsible.

With the launch of these guidelines, the SEC aims to foster a reliable and vibrant green bond market in Ghana, encouraging sustainable investments and contributing to the country’s environmental and economic development.

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