The government of Ghana announced today the opening of a dedicated green bond exchange. “The Green Exchange, to be based in Ghana’s capital Accra, aims to enable companies to issue billions in green bonds and for investors to trade the debt in a secondary market,” said Orla Enright (pictured, right), the exchange’s CEO, according to information relayed by Bloomberg.

The facility adds to a list of opportunities for African governments and companies to raise funds for investments that meet the Sustainable Development Goals or commitments to combat climate change. The initiative is presented as the most successful project in an IFC-led program in Africa. In Nigeria and South Africa, where the institution has also been working to create a green bond market, the process ended up with the establishment of a dedicated segment within existing stock exchanges.

In May 2021, the IFC and the Ghanaian Securities and Exchange Commission (SEC) signed an MoU to assist in the regulation of this type of activity. "Finding new avenues for green financing is a key priority for IFC. Our partnership with the SEC to design the framework for green bonds in Ghana will, in turn, help Ghana achieve its climate goals with projects that create jobs and spur economic growth," said Ronke Ogunsulire, IFC Country Manager for Ghana.

Africa stands out as the continent with the most potential in terms of renewable energy and is also the one most in need of sustainable investment. Yet companies and governments on the continent are struggling to raise resources from a potential green bond issuance that is estimated to reach $1 trillion by 2021, sources said.

A high-risk perception adds to the uncertainties of green projects in terms of profitability and even maturity. Numerous analyses have estimated that Africa's green financing needs would reach $50 billion per year. But these estimates may be underestimated if sustainability is taken into account for all development projects on the continent.

 Idriss Linge