Green bonds, debt securities issued to finance environmentally sustainable projects, are gaining traction globally and their potential is quite significant in West Africa. While the region seeks to tackle pressing environmental challenges, such as climate change and energy access, green bonds provide the opportunity to finance these initiatives while offering investors attractive returns.
African stock exchanges should invest in green bonds as this aligns with the continent’s sustainable development goals (SDGs). By linking finance to environmental outcomes, green bonds provide a direct avenue for investment in clean energy, efficient transportation and water management projects. This helps mitigate the effects of climate change and also fosters long-term economic stability and growth.
Sani Bankoley, an expert in climate finance and the CEO of ORI Partners, sheds some light on climate finance, “Africa faces a staggering $3 trillion climate finance gap by 2030, yet green bond issuances remain marginal. In Sub-Saharan Africa, only 18% of climate finance comes from the private sector, far below the global average of 50%. To bridge this gap, there is an opportunity to unlock capital markets by standardising climate finance products and green bonds could play a pivotal role.”
She adds, “WAEMU governments are making progress in aligning their green taxonomies with international standards, particularly the EU, which accounts for over 50% of global sustainable investments. Therefore, there is an opportunity for African stock exchanges to accelerate this momentum by facilitating green bond listings.”
The global green bond market has grown exponentially, exceeding $1.4 trillion in cumulative issuances. According to Bankoley, only by strengthening regulatory frameworks and incentivising green bond adoption can African exchanges attract ESG-driven investors, finance large-scale renewable energy and climate-smart agriculture projects and position the continent as a leader in sustainable finance.
She continues, “WAEMU, in particular, stands to benefit significantly. With the right policies, green bonds can mobilise private capital at scale, reduce investment risks, and drive long-term, climate-resilient economic growth.”
Linking African projects with international green finance funding
The fact is there’s immense funding potential in global green finance markets, as seen in Europe, and this could play a transformative role in bridging the climate funding gap, especially on the African continent, where countries are most vulnerable to climate change.
But just how can African businesses create projects eligible for funding from international green finance mechanisms, including UK-based funds?
Bankoley says, “Unlocking this potential requires African businesses to build strong capital market access aligned with international standards. Investors seek high-integrity projects with measurable impact, financial viability, and scalability. To attract this funding, projects should be structured with robust policies, engage early with investors, and leverage blended finance mechanisms, integrating support from DFIs and IFIs through green bonds and carbon credit opportunities.”
Bankoley, a speaker at the upcoming BRVM Investment Days and the Roundtable on Exploring Green Finance Opportunities in the WAEMU region adds, “Equally, governments must create enabling policies that de-risk investments and enhance market confidence. West Africa has a unique opportunity to lead in green finance by fostering strategic partnerships and developing robust, bankable projects. The London BRMV event will be a key moment to accelerate these efforts.”
For more insights on green finance from Sani Bankoley, register for the upcoming BRVM Investment Days on 8-9 April in London. Go to www.brvminvestmentdays.com for more.
