GHANA Trends and Developments Contributed by: Adelaide Benneh Prempeh, Michelle Nana Yaa Essuman, David William Akuoko-Nyantakyi and Audrey Nana Oye Addy, B&P Associates
Green Bonds: A New Era in Ghana’s Securities Landscape Introduction
reaching USD575 billion in 2023, according to Bloomberg. The Guidelines were published in accordance with the Green Bond Principles (the GBPr) cre - ated by the International Capital Market Associ - ation (the ICMA). The Guidelines aim to provide a structured framework for issuing and regulating green bonds in Ghana, facilitating the develop - ment of a domestic green securities market and maintaining the credibility of green securities through transparency, disclosure, integrity and quality. They also seek to prevent “greenwash - ing” – the issuance of, and investment in, mis - leadingly labelled green bonds. By encouraging green bond issuance in Gha - na, the Guidelines seek to enable businesses to invest in sustainable projects across various sectors, such as renewable energy, sustainable agriculture, clean transportation, and pollution prevention. Scope and application The SEC Guidelines set out clear regulations for green bond issuers which include public compa - nies, external companies, supranational institu - tions, local government authorities, and statutory corporations. Issuers must comply with Ghana’s legal framework, including the Companies Act, 2019 (Act 992), the SEC Regulations, 2003 (L.I. 1728), and other relevant legislation. The Guide - lines also apply to entities with existing note pro - grammes, allowing them to issue green bonds under these programmes, subject to submitting a supplementary prospectus or complying with any requirements the SEC may impose. In instances of ambiguity in interpreting the Guidelines or any other SEC-issued Directives, the SEC’s interpretation will be final. Additionally,
In the face of increasing concern over the impact of climate change, governments and organisa - tions worldwide are making significant strides toward sustainable finance. With climate risks becoming more prevalent across all sectors of the economy and investors showing greater interest in socially and environmentally friendly projects, the push for sustainable development and investment is gaining strong momentum – and it is no exception in Ghana. Public budgets and investment vehicles are now increasingly considering climate risk in their financial deci - sions. As such, regulatory bodies are issuing new regulations to incorporate sustainability and sustainability-related disclosures in busi - ness activities. In response to the increasing popularity of green bonds, Ghana’s Securities and Exchange Commission (SEC) issued the Securities Industry (Green Bond) Guidelines 2024 SEC/ GUI/003/03/2024 (“the Guidelines”). The Guide - lines mark a significant step in formalising the domestic green securities market and demon - strating the country’s commitment to sustain - ability, by encouraging investment in projects that protect and enhance the environment. This article provides a brief overview of the Securities Industry (Green Bond) Guidelines 2024, highlighting certain key provisions that issuers of green bonds must bear in mind. A framework for a domestic green bond market Green bonds are debt securities designed to raise capital specifically for environmentally ben - eficial projects. Over the past decade, they have grown in popularity worldwide, with global sales
120 CHAMBERS.COM
Powered by FlippingBook