(Business in Cameroon) - After officially joining the World Bank's Sustainable Banking and Finance Network (SBFN), the Bank of Central African States (Beac) has expressed its willingness to promote green bonds in the CEMAC financial market.
During an international forum held last May 8-9 in Douala, Beac Governor Abbas Mahamat Tolli (pictured) said green bond issues can be explored to boost the Central African Stock Exchange (Bvmac), which "despite its great potential, remains unattractive compared to other African regional financial markets”. These assets are used to finance projects aimed at combating global warming and supporting the energy transition.
Abbas Mahamat Tolli explained that the initiative is timely “since the sub-region is heavily affected by climate change, despite being a low emitter of greenhouse gases. Deforestation, drought, overexploitation, and hydro-climatic variability are putting forest ecosystems and the livelihoods of neighboring populations at risk”. According to estimates, the Congo Basin has lost about 3.1 million hectares of forests in the last five years and the Lake Chad region has decreased by nearly 90%, from 25,000 km2 to 1500 km2 in the last 50 years.
Let’s however note that green bonds are not yet legally regulated by the Cemac market regulator, Cosumaf. Beac, therefore, intends to adopt a progressive approach that would enable it to capitalize on the experiences of countries well advanced in this field to better understand the underlying risks and promote the emergence of green financial instruments and products.
Beyond their environment-friendly nature, the introduction of green bonds is expected to broaden the supply of financial products in Cemac. In addition to traditional stocks and bonds, the market rules, adopted in July 2022, now include digital assets, Islamic bonds, and a wide range of collective investment products.