Gabon plans to issue Africa’s largest sovereign green bond

Gabon’s sovereign wealth fund plans to launch the largest sovereign green bond ever in sub-Saharan Africa which is expected to be between $100 million and $200 million. The proceeds of the operation will finance the construction of hydroelectric power stations in the country.

“The world’s second most forested country and its sovereign wealth fund will initially focus on selling 90 million carbon credits based on the emissions absorbed by its trees. It can also wait for better market conditions,” said Akim Daouda, head of Gabon’s Sovereign Fund.

The official clarified that the operation will be done at the right time, citing the slowdown in sales of green bonds to governments in 2022, after exponential growth in recent years.

“We’ve all seen the markets these days and it might not be the right time to raise funds,” he said.

In its national energy transition program, Gabon has set up five flagship programs, namely: the transition to hydroelectric energy, the extension of thermal power plants like that of Alenakiri or power plants such as that of Cap Lopez, the deployment of solar panels, the launch of an integrated drinking water supply and sanitation program, the commissioning of water towers and treatment stations.

Global issuance totaled $71.4 billion this year, up from $92.3 billion in 2021, according to data compiled by Bloomberg Intelligence. Yet this year’s sales are more than four times greater than those achieved through titles in 2018.

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