Mozambique wants to promote the domestic market for issuing sustainable bonds on the stock market, to finance blue or green economy projects, known as “Green Bonds” and “Blue Bonds”, as set out in a draft decree, consulted on Thursday by Lusa.
“This draft decree will establish the normative reference framework for promoting the issuance of sustainable bonds in the country, providing investors and potential issuers with a list of rules aligned with international standards for the issuance and labelling of sustainable bonds in Mozambique,” reads the document, put out for public consultation by the central bank.
“The issuance of this type of bond is paralleled in many regional and international markets and has proved to be an important factor in materialising the efforts of governments to reduce the impacts of climate change,” adds the draft decree establishing the Legal Framework for sustainable bonds, which will later be analysed by the Cabinet.
It involves the regulation of sustainable bonds, which “are securities representing medium and long-term loans used exclusively to raise funds with the aim of financing viable projects from the point of view of environmental protection and conservation, climate and social aspects, as well as those linked to sustainability”.
They include Green Bonds, when the issue proceeds are used “to finance or refinance projects and purchase assets capable of benefiting the environment or helping to mitigate the effects of climate change”.
Also Blue Bonds, when the value of the issue is used to “finance maritime and ocean-based projects that have environmental benefits” and Social Bonds, when the financing is used to “finance projects that have 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 funding and investment sources and to provide a financial instrument focused on sustainable finance”.
It defines that the subscription “may be public or private”, that access to the primary market for sustainable bonds by investors “is through a financial intermediary” and that “only intermediaries who are members of the clearing and settlement system” at the Mozambique stock market (BMV) may organise” the issues.
The decree establishes that projects eligible for the issue of sustainable bonds “or linked to sustainability” are those whose investments are geared towards renewable energy and energy efficiency, resilience to climate change for areas and sectors of high vulnerability, 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.
Also blue economy projects, including fisheries and aquaculture, trade, enhancement and food safety, within the scope of the green and blue economy, marine and coastal environment, aquatic tourism and ecotourism, maritime transport and port development, maritime spatial planning and enhancement of coastal zones and bays, services and scientific research within the scope of the green and blue economy, and maritime safety.
Also included are programmes and projects with an impact on employment, including through the potential effect of financing micro, small and medium-sized enterprises and microfinance, the reintegration of women in vulnerable situations, affordable housing for young people, and innovative and viable economic ventures linked to the green and blue economy.
Lusa
