Absa lists Botswana Stock Exchange’s first sustainable bond
- Botswana Stock Exchange (BSE) listed its first-ever Sustainable Bond, valued at P47.4 million (~$3.5 million), under Absa Bank Botswana Limited's Medium Term Note Programme.
- CEO of BSE, Mr. Thapelo Tsheole, congratulated Absa and stakeholders for this historic achievement in cultivating a conducive market for Sustainable Bonds.
- Fee incentives for listing Sustainable Bonds contributed to Botswana's improved ranking from 8th to 6th position in the Absa Africa Financial Markets Index (AFMI) 2023.
The Botswana Stock Exchange (BSE) recently listed its first-ever Sustainable Bond on the BSE. This groundbreaking bond, totaling P47.4 million (~$3.5 million), was listed by Absa Bank Botswana Limited (Absa) under its P2.0 Billion Medium Term Note Programme.
Mr. Thapelo Tsheole, the CEO of BSE, expressed his enthusiasm, stating, "This is historic for the market, and I would like to congratulate Absa and their stakeholders for this magnificent achievement. Largely, it’s as a result of the various strategic undertakings to cultivate and foster a conducive market for Sustainable Bonds."
The impact of the fee incentives for listing Sustainable Bonds, which includes a 25% discount on initial listing fees and annual sustaining fees compared to conventional bonds, played a crucial role in elevating Botswana’s ranking in the Absa Africa Financial Markets Index (AFMI) 2023 from the 8th position in 2022 to the 6th position in 2023.
Green, Social, and Sustainable (GSS) bonds have gained significant traction on a global scale as policymakers and financiers seek market-driven solutions to address climate change. This trend is part of a broader surge in financial instruments aligned with environmental, sustainability, and governance (ESG) objectives. Despite Africa holding 23% of official climate finance, the continent accounts for less than 1% of global green bond issuances. Moreover, African nations face the challenge of paying more than twice the rates of similarly rated peers to access financial markets. Presently, Africa faces a multitude of pressing issues, including a high debt burden, historical challenges with borrowing costs, post-COVID recovery, climate change impacts, and shortages in energy and food due to the conflict in Ukraine. Given these challenges, there is an increased urgency to explore innovative avenues for raising funds from private investors within a transparent and efficient framework, and at reasonable rates. This becomes crucial to navigate the complex landscape and address the diverse economic and environmental challenges facing the continent.