2024-03-22 09:55:05
The country is preparing for its first release of green bonds to finance green projects. And it was the CDC that carried out this mission.
A green bond, also known as an environmental bond or sustainability bond, is a specific type of bond. The latter can be issued by a company or by a government entity, with the aim of financing green projects having a positive impact on the environment.
These bonds are used exclusively to finance sustainable projects, such as investments in renewable energy, waste management, or other initiatives aimed at reducing carbon dioxide emissions.
A booming market
In recent years, the global green bond market has continued to gain popularity among investors, for several reasons. It is essentially a bond market which guarantees an increased level of transparency and where interest rates are now at their highest in 10 years.
According to “Axa Investment Manager”, the green bond market was estimated, at the end of July 2023, at nearly 1,400 billion dollars, with more than 700 distinct issuers distributed between companies, banks and States. Over the year 2023, green issues reached more than $285 billion, with more than 60 new issuers.
This means that it is a booming market from which Tunisia and Tunisian companies can take full advantage, to finance structuring green projects.
Moreover, it is within this framework that the Caisse des Dépôts et Consignations (CDC) is preparing for the first release of “Green Bonds” to finance projects of a certain size. The Caisse is in the process of building the “pipe” of projects that require a certain maturity. A prospecting study for an issuance of green bonds in Tunisia was carried out for this purpose and the results of which were recently revealed in Tunis.
In reality, the idea for this project was born following the publication, in 2021, of a report which identified the obstacles to financing renewable energy projects under the authorization regime. A document which was developed in partnership between the Ministry of Industry and Mines and the World Bank. This report notes that the traditional financing offer through bank credit is insufficient to cover the financing needs of the renewable energy sector, particularly in terms of risk management, horizon and volume. This observation led to the recommendation to develop specific financing mechanisms and instruments. Among these instruments, raising funds via green bonds would be a relevant alternative.
Establish the reference framework
Today, tapping into green financing constitutes an undeniable solution to achieve the objectives that Tunisia has set for itself in terms of adaptation, but also mitigation of the effects of climate change. Because, let us remember, the financing needs necessary to implement Tunisia’s National Determined Contribution (CDN) over the period 2021-2030 are estimated at more than 19.4 billion dollars.
A substantial sum that cannot be mobilized solely through traditional financing mechanisms. The study therefore aims, on the one hand, to assess the maturity of the green investment market in Tunisia for a possible issuance of green bonds and on the other, to identify the prerequisites for doing so and thus put in place the “Green Bond Framework” repository which constitutes the set of guidelines and procedures established for the management and issuance of green bonds, while ensuring the transparency, credibility and integrity of these bonds.
The study made it possible to identify the obstacles facing the realization of green projects in Tunisia. This concerns, in particular, the lack of skills in terms of evaluating green projects by the financial sector as well as a financing offer poorly adapted to the specificities of these projects with self-financing requirements and binding real guarantees. This is how the study recommends putting in place financial mechanisms adapted to the specificities of green projects, while offering the necessary support to economic operators who wish to succeed in their ecological transition.
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