Zimbabwe: ZSE Crafts Green Bonds Framework

25 November 2019

The Zimbabwe Stock Exchange is engaging critical stakeholders in the development of a Green and Social Bond framework as it continues to broaden capital market offerings.

Capital markets investments typically cover a wide range of products, but in Zimbabwe the capital market is not that well developed and is dominated by equity shares.

The sector regulator, Securities and Exchange Commission of Zimbabwe (SECZ) has been working on the development of a wide range of investment products such as real estate investment trusts (REITS) and derivatives and just last week a statutory instrument to that effect was gazetted.

The latest initiative goes green.

Green and Social Bonds are any type of bond instrument where the proceeds will be exclusively applied to eligible environmental and/or social projects.

And they are regulated instruments subject to the same capital market and financial regulation as other listed fixed income securities.

According to ZSE's draft Green and Social Bond framework "the use of proceeds for green bonds shall be aimed at addressing key areas of environmental and climate matters including but not limited to climate change adaptation, clean transportation, green buildings, sustainable waste management, natural resources depletion, renewable energy, energy efficiency, prevention of loss of biodiversity, pollution prevention and control, terrestrial and aquatic biodiversity conservation, sustainable water and wastewater management".

On the other hand, Social Bonds proceeds tend to be used for projects that have a positive social outcome, for example, affordable housing, access to essential services like healthcare and education as well as affordable basic infrastructure such as clean drinking water.

The local bourse has made calls for input from stakeholders and the general public.

"The ZSE has commenced work on guiding principles for the issuance of Green and Social Bonds in Zimbabwe.

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