Green bonds framework for issuance, regulation in offing

THE Capital Markets and Securities Authority (CMSA) in collaboration with the European Union (EU) under the Technical Assistance and Information Exchange instrument (TAIEX) for International Partnerships (INTPA) are developing a framework for the issuance, regulation and supervision of green bonds in the country.

“The CMSA is grateful that this partnership lays a strong foundation for taking the financial sector and the Tanzanian economy to higher heights,” said the CMSA Chief Executive Officer, Mr Nicodemus Mkama.

He argued that the issuance of green bonds is an important step in building sustainable financial markets for sustainable economic development and growth.  In line with this, stakeholders from Tanzania Mainland and Zanzibar yesterday gathered in Dar es Salaam for a workshop to offer inputs on the green bonds.

“This workshop is part of the implementation of the activities identified under the programme,” Mr Mkama said.

He thanked Mr Cédric Merel, the Head of Cooperation for EU delegation to Tanzania, and other members of the delegation including Ms Karina Dzialowska and Ms Mihaela Marcu for their tireless cooperation and support that has led to making the workshop successful.

The Five-Year National Development Plan III (FYDP III) has identified the issuance of thematic financial products including green bonds as among alternative financing strategies for supporting the implementation of projects in the public sector.

In addition, the 10 Years Financial Sector Development Master Plan (FSDMP) 2020/21-2029/30 aims at, among others, strengthening long term development finance by broadening a range of financial instruments to enable public and private sectors to raise long term funds for development projects.

He noted that the government’s need for financing development projects has been increasing whereas sources of finance are still limited.

In pursuit of a developmental role under the Capital Markets and Securities Act, Cap 79 of the Laws of Tanzania, the CMSA is spearheading efforts for the issuance of thematic capital market products including green and social impact bonds in Tanzania.

The efforts are an important milestone for building a competitive economy for human development and the attainment of United Nations Sustainable Development Goals.

“The enabling environment coupled with strategic geographical positioning of the country, provide an edge for successful issuance and flourishing of the products,” he noted.

The workshop aims at building the capacity of capital market stakeholders in respect of the international regulatory framework on sustainable finance, particularly approaches, regulations and standards on green bonds and highlighting important aspects that need to be considered in the development of the regulatory and supervisory framework for issuance of green bonds in Tanzania.

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