The value of foreign loan securities issued by African businesses to raise funding for initiatives that adhere to environmental, social, and governance criteria is expected to reach $4.4 billion by 2024.
According to an Ecofin Agency study published on Monday, the value of ESG bonds raised during January and February 2024 exceeded the $1.4 billion raised in 2023.
The African Development Bank has been an important player in the sector.
In January 2024, the AfDB successfully piloted a $2 billion social bond offering and issued $750 million in hybrid sustainability bonds.
The Arab Bank for Economic Development in Africa is another major player in the area.
“BADEA has issued up to €500 million with the primary arranger being the African Export-Import Bank.
So far, this market momentum has helped the French banking giant BNP Paribas, which presently leads the continent’s ranking of arrangers for this form of bond, accounting for 17.5% of the market.
Following are the American institutions JPMorgan and Bank of America Securities,” according to the study. ESG bonds continue to flourish in Africa, mirroring a thriving global market.
According to Moody’s numbers and predictions, the total value of these emissions is estimated to reach $950 billion by 2024.
The growth of ESG bonds in Africa aligns with the global trend, with the total value of emissions expected to reach $950 billion in 2024, according to projections by Moody’s rating agency.
These financial products receive support from development finance institutions such as the AfDB, which backed initiatives in Egypt and Cote d’Ivoire in 2023.
It stated that certain financial instruments were backed across the continent by development financing institutions such as the African Development Bank, which in 2023 supported moves in that direction from two nations (Egypt and Cote d’Ivoire).
“Several local markets are also developing, notably in sub-regions like the West African Monetary Union where the main agency in charge of managing the money market (UMOA-Titres) issued, at the end of 2023, the first ESG bonds in the sub-region,” according to the report.
