Malawi Stock Exchange (MSE) is planning to introduce Green Bonds—debt instruments used raise funds for new and existing projects which deliver environmental benefits and a more sustainable economy—in response to demand for clean finance.
Green Bonds can include renewable energy, sustainable resource use, conservation, clean transportation and adaptation to climate change.
MSE chief executive officer John Kamanga, in an interview on Monday, said there has been an ever increasing call from investors, mainly international, for Green Bonds, hence their drive to introduce the bonds.
He said: “With green finance, people are not looking at the cost aspect but they are looking at the environmental sustainability; that is why as a stock exchange which strives to do the right thing and align ourselves with our peers, we are trying to come up with guidelines on tapping on these resources.”
Kamanga said the MSE is also targeting projects such as student’s accommodation, houses for Police, Army and Immigration officers to be financed by clean financing.
He said: “We have seen the Ministry of Lands talking about construction of houses for our men in uniform. We would like to tie the financing aspect of such infrastructure to these bonds. There are lots of lobby groups which would want to channel their investment towards clean finance; therefore, the MSE would like to get ready to tap on those resources to meet this development.”
On his part, Reserve Bank of Malawi governor Wilson Banda said Green Bonds are a way to go, especially now when issues of climate change need to be looked into, and addressed.
He said: “We now need to be thinking about environmentally-friendly projects because we do not want institutions that would create debt; pollution and harm our environment.
“Given that Green Bonds are essentially meant to provide resources to finance investment that are environmental-friendly, we are in full support of this initiative.”
The MSE introduced its debt market platform in 2010, considering the possibility that some entities may not be willing to bring in shareholders in their companies but would still want to raise capital through the stock market.
This far, the MSE has about 46 debt securities listed on the market, in which 44 are government securities and two are corporate bonds issued by My Bucks Banking Corporation.