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
the SEC can grant exemptions or waivers from complying with the Guidelines. By establishing a structured regulatory frame - work, the SEC seeks to attract both domestic and international investors to Ghana’s capital market. Issuance of green bonds Issuers are required to undergo an independent review to confirm the “green” status of eligible projects associated with green bonds before the bonds are issued and their compliance to the obligations the bond issuance is subject to. This review includes an initial external review conducted by a qualified, independent expert which aligns with the ICMA’s GBPr. This review is then submitted to the SEC with the Green Bond Framework upon issuance. Issuers are to obtain further assurance through certification, scoring, or rating of the green bond’s environmental cre - dentials. Issuers may also opt for additional veri - fications such as external third-party monitoring of specific issuance criteria. The independent expert must have the requisite expertise to assess the green characteristics of the bonds issued and prepare a due diligence report that assesses the projects’ expected environmen - tal impact; recommends and verifies terms to promote alignment with green bond compliance requirements; and assesses the material envi - ronmental risks associated with eligible projects and how the issuer manages these risks. Approval process of the green bonds issuance The Guidelines outline the process for obtain - ing SEC approval for green bond issuance. This process involves three key stages: pre-issuance, project identification, and mandatory declara - tions.
The pre-issuance phase involves issuers look - ing to engage in public bond issuance following the stringent regulatory framework which gov - erns the issuance of bonds to the public. This includes filing a draft information memorandum or prospectus with the Securities Exchange Commission, or an applicable pricing supple - ment where a shelf programme has been pre - viously approved. Issuers must also comply with relevant regulations such as the Compa - nies Act, 2019 (Act 992), and L.I. 1728 in addi - tion to the Guidelines. They must also have the issuance approved by the relevant bodies and structure the issuance with the assistance of a skilled adviser. All documentation and internal processes of the issuer must align with best practices described in the Guidelines and the ICMA’s GBPr. When identifying projects for a Green Bond Framework, clarity is paramount. The issuer must accurately describe the project types, the methodology of selection in place by the issuer as well as the methodology for evaluating and financing the project. The framework must indi - cate which projects or project portfolios are impacted by refinancing efforts where the pro - ceeds of the issuance is to be used for refinanc - ing. Issuers are to comply with the mandatory decla - rations in L.I. 1728 including a declaration by the directors accepting responsibility for the accu - racy of the information provided in the prospec - tus and a statement by the person managing the issue stating that all material facts about the issue and the issuer have been fully disclosed. Use of proceeds To safeguard the credibility of Ghana’s green bond market, the Guidelines mandate strict requirements for the use of bond proceeds.
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