The amount of international loan securities issued by African organizations to raise money for investments that follow Environmental, Social, and Governance principles has reached $4.4 billion in 2024.
As reported by Ecofin Agency on Monday, the value of ESG bonds between January and February 2024 has exceeded the $1.4 billion raised in 2023.
The African Development Bank has played a significant role in this sector.
In January 2024, AfDB successfully tested an issue of social bonds worth $2 billion and issued hybrid sustainable bonds of $750 million.
Another significant player is the Arab Bank for Economic Development in Africa.
The report mentioned that with the support of the African Export-Import Bank as the lead arranger, BADEA has issued up to €500 million. This market momentum has benefited the French financial group BNP Paribas, which currently leads the ranking of arrangers for this type of bonds on the continent, with a 17.5 percent market share. Following are the American institutions JPMorgan and Bank of America Securities.
ESG bonds in Africa continue to grow, in line with a thriving global market.
The total value of these types of emissions is expected to reach $950 billion in 2024, according to figures and estimates from the rating agency Moody’s.
It was noted that these financial products were supported on the continent by development finance institutions like the AfDB, which in 2023, supported initiatives from two countries (Egypt and Cote d’Ivoire) in that regard.
“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,” it stated.
