Mozambique plans to issue green bonds and blue bonds on the stock exchange

Login

Register

http://www.clubofmozambique.com/

Mozambique plans to issue green bonds and blue bonds on the stock exchange

3:39 CAT | 30 Jan 2025

Image: Wikimedia Commons/ CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=1104860

Mozambique wants to promote sustainable bond issuance market on the stock exchange, to finance projects in the blue or green economy, known as “Green Bonds” and “Blue Bonds”, as provided for in a draft decree consulted by Lusa today.

“This draft decree will establish the regulatory framework of reference for promoting the issuance of Sustainable Bonds in the country, providing investors and potential issuing entities with a list of rules aligned with international standards for the issuance and labelling of Sustainable Bonds in Mozambique,” reads the document submitted for public consultation by the central bank.

“The issuance of this type of bond finds parallels in many regional and international markets and has proven to be an important factor in materializing governments’ efforts to reduce the impacts resulting from climate change,” adds the draft decree establishing the legal framework for sustainable bonds, which will later be analysed by the council of ministers.

The framework involves the regulation of sustainable bonds, which “are securities representing medium and long-term loans used exclusively to raise funds for the purpose of financing projects that are viable from the point of view of environmental protection and conservation, climate and social aspects, and those linked to sustainability”.

They include ‘Green Bonds’, when the value of the issue is used “to finance or refinance projects and purchase of assets capable of bringing benefits to the environment or even contributing to mitigating the effects of climate change”.

Also ‘Blue Bonds’, when the value of the issue aims at “financing maritime and ocean-based projects that have environmental benefits” and ‘Social Bonds’ financing aims at “projects that cause a positive social impact on the community”.

The document under public consultation, prepared by the previous government, recognises the need to “ensure the diversification of sources of financing and investment and to provide a financial instrument focused on sustainable finance”.

It defines that subscription “may be public or private”, that access to the primary market for sustainable bonds by investors “is done through a financial intermediary” and that “only intermediaries that are members of the clearing and settlement system for operations” on the Mozambique Stock Exchange (BMV) may organise the issuances.

The decree establishes that projects eligible for the issuance of sustainable bonds “or linked to sustainability” are those whose investments are geared towards renewable energy and energy efficiency, resilience to climate change for highly vulnerable areas and sectors, clean and resilient transport, reduction of pollution and greenhouse gas emissions, water efficiency and wastewater management, sustainable management of natural resources and reduction of coastal erosion.

Blue economy projects, including fisheries and aquaculture, trade, food valorisation and security, within the scope of the green and blue economy, marine and coastal environment, tourism and water-based ecotourism, maritime transport and port development, maritime spatial planning and valorisation of coastal areas and bays, services and scientific research within the scope of the green and blue economy, and maritime security.

These also include programmes and projects with an impact on employment, including through the potential effect of financing micro, small and medium enterprises and microfinance, reintegration of women in vulnerable situations, affordable housing for young people, and innovative and viable economic ventures linked to the green and blue economy.

Source: Lusa