South Africa has a new financing mechanism that is essential for investing in climate change mitigation and adaptation projects. It is a technical manual to help South African municipalities determine whether a sustainable bond is an appropriate tool to finance their projects.
The manual is already available in two municipalities in the country, namely Tshwane, where the city of Pretoria is located, and eThekwini in KwaZulu-Natal province. The document will help speed up their preparation for a green bond issue. “The manual presents detailed, accessible and practical steps involved in issuing green bonds and discusses the associated tasks and activities for South African municipalities. It gives them an overview of the process of preparing, issuing and managing a sustainable bond,” says Barbara Creecy, South Africa’s Minister of Forestry, Fisheries and Environment.
The technical manual was developed under the auspices of the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) and the Partnership for Green Economy Action (Page) in partnership with the United Nations Development Programme (UNEP) and the German Agency for International Development Cooperation (GIZ) under the International Climate Initiative (IKI).
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According to local authorities in South Africa, the country has experienced tremendous growth with the global green and sustainable bond market in 2021 exceeding $1000 billion in all currencies where the use of proceeds was linked to green, social, sustainable and development objectives. For the year 2022, the Green Bond Handbook will assess whether the bonds issued have an environmental and economic impact that supports the development of the green economy.
Benoit-Ivan Wansi