WEST AFRICA: WAMU publishes manual on green bond issuance

West African Monetary Union (WAMU) financial market players now have a tool to issue green bonds. This is an instrument called “Guide for the issuance of green bonds in the community space”. The document was released on March 31, 2020 by the Regional Council for Public Savings and Financial Markets (CREPMF), an organ of WAMU, in partnership with the African Development Bank Group (AfDB). This working instrument aims to help sub-regional financial market players to promote the use of capital markets in the financing of projects responding to environmental, social and sustainable development imperatives.

The guide to issuing green bonds in the West Africa sub-region will also serve to broaden the investment ecosystem, promote the development of the green bond market in the UMOA zone and attract new regional issuers as well as national and international investors.

Issuers wishing to benefit from a green, socially responsible or sustainable label on the West African Economic and Monetary Union (UEMOA) financial market must comply with all the elements described in this guide. It should be noted that green, socially responsible and sustainable bonds refer to bonds whose proceeds are exclusively allocated to the financing or refinancing, in whole or in part, of new or existing projects with positive environmental and social impacts.

Issuers will find in this working document a summary of the principles to which they must comply and a clarification of the approach to be followed in order to conduct credible operations that comply with national and international best practices. Investors will find useful information to help them understand this segment of the debt market.

The new tool of the West African Monetary Union (WAMU) is mainly based on the principles set out by the International Capital Markets Association (ICMA), one of the two reference frameworks for sustainable finance in the world, taking into account the specificities of the regional (West African) financial market. These principles aim to promote the integrity of the bond market by advocating transparency, the dissemination of information and the use of adequate reporting. The ICMA standards also aim to promote the flow of information necessary to allocate more funds to projects with a positive environmental and social impact, as well as to promote and develop the market for these instruments.

Ines Magoum

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