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Thursday, May 23, 2024

Green bond panacea to greener economy transition

Story by Tichaona Kurewa

AS the 56th United Nations Economic Commission for Africa (UNECA) conference in Victoria Falls enters its fourth day, the conversation is heating up around green bonds as participants explore how these financial instruments can become a crucial driver for Africa’s transition to a more environmentally friendly economic model.

Green bonds are financial instruments specifically designed to raise capital for projects with environmental benefits and are emerging as one of the critical tools for mobilising resources for Africa’s green transformation.

Giving an update on proceedings at the conference, UNECA Committee of Experts chairperson, Mr Andrew Bvumbe highlighted the importance of green economy financing.

He emphasised the unique potential of green bonds to unlock private sector investment and contribute significantly to sustainable development across the continent.

“Green bonds offer a unique opportunity to unlock the vast potential of private sector investment in Africa’s green economy. By providing investors with a secure and impactful way to allocate their capital, green bonds can significantly contribute to sustainable development across the continent.

“Africa also needs to take a leading role in carbon markets by developing a local a regional market where we can trade our carbon credits at a price equal to those in Europe for instance, right now, carbon credits in Africa are going for US$10 and if you go to Europe they go for US$100.”

UNECA representative also emphasised the importance of exploring alternative financing avenues in the face of global shocks.

“We also need to look at domestic resource mobilisation as well as tapping more from the diaspora remittances to finance the transition to green economies. Africa has the potential to develop green economies with the necessary support,” said UNECA Deputy Executive Secretary, Mr Antonio Pedro.

Despite facing threats like civil wars and extreme weather events, Africa’s abundant resources and commitment to environmental responsibility position it as a potential leader in the green
economy transformation.

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