The Regional Council for Public Savings and Financial Markets (CREPMF), an organ of the West African Monetary Union (WAMU), has just made available to the UMOA's financial market players a guidebook on Green, Social and Sustainable Bonds issues. The tool will be used to promote the use of capital markets in the financing of environmental projects in West Africa.
Financial market participants of the West African Monetary Union (WAMU) now have a tool at their disposal to issue green bonds. It is an instrument called “Guide for the issuance of green bonds in the Community space”. The document has been released on March 31, 2020 by the Regional Council for Public Savings and Financial Markets (CREPMF), an organ of the WAMU, in partnership with the African Development Bank (AfDB) Group. This working instrument aims to help sub-regional financial market players promote the use of capital markets in the financing of projects that meet environmental, social and sustainable development imperatives.
The guidebook for the issuance of green bonds in the West Africa Subregion will also serve to broaden the investment ecosystem, promote the development of the green bond market in the WAMU 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 will have to comply with all the elements described in this guide. It is worth noting 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 paper a summary of the principles they must comply with and a clarification of the approach to be followed in order to carry out credible operations that meet 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 circulation of information needed to allocate more funds to projects with a positive environmental and social impact, and to promote and develop the market for these instruments.