In a strategic move to stimulate the financing of projects that support sustainable development, the Mozambican government introduced a new decree in December 2024 establishing the legal framework for Sustainable Bonds.
This decree aims to provide a specific legal framework for issuing and placing these bonds on the market, thus promoting the diversification of funding sources and investment in environmental and social initiatives, according to data from the Bank of Mozambique, consulted on Monday (20) by Diário Ecónomico.
The new decree, as detailed in the government document, covers the creation of a legal framework that allows the issue of securities specifically aimed at financing viable projects from the point of view of environmental protection and conservation and climate aspects.
These bonds are designed to raise funds that will be exclusively invested in sustainable projects, such as renewable energy, energy efficiency and support for small and medium-sized companies with a focus on sustainability.
According to the document, Sustainable Bonds represent a significant innovation in the Mozambican financial market, as they differ from traditional bonds by requiring both issuers and investors to act with a commitment orientated towards environmental and social sustainability.
In addition, the decree introduces tax incentives and reductions in operating costs for issuers, such as exemption from paying for deeds and notary fees, as well as reduced fees for registering and maintaining the bonds on the Stock Exchange.
To ensure transparency and alignment with sustainable objectives, the decree also stipulates that the issuing of Sustainable Bonds requires assessment by an independent assessor.
This evaluator will be responsible for verifying that the projects being financed are actually aligned with the established environmental and social criteria, thus promoting the integrity and effectiveness of sustainable financing.
The initiative comes at a crucial time, as Mozambique and many other nations are actively seeking ways to combat climate change and promote social development through responsible and future-orientated sustainable investments.
With these new regulations, Mozambique is at the forefront of efforts to integrate environmental and social considerations more deeply into its capital market practices.
This decree comes into force within thirty days of its official publication, marking a significant step for Mozambique in promoting a greener and more inclusive economy.
Text: Felisberto Ruco
