Finance

Easing Africa’s climate crisis: Can green bonds help close the climate finance gap?

Published

1 year ago

November 11, 2024

Press Room

Easing Africa’s climate crisis: Can green bonds help close the climate finance gap?

Summary

Africa’s share of the global USD 2.2 trillion green bond market is less than 1%. To increase its green bonds market share, Africa must mobilise the combined capacity of corporations, municipalities, banks and sovereign governments.

Although the growth of the green bond market in Africa trails the rest of the world, the continent has enormous potential to issue more green bonds. By 2023, over 20 green bonds had been issued by Tanzania, Rwanda, Gabon, Seychelles, Nigeria, South Africa, Kenya, Morocco, Mozambique, Nigeria, Namibia, Mauritius, and Zambia.

Unlocking green bond opportunities requires strong national regulatory frameworks, incentives and consistent collaboration between both public and private sectors and local and international financial institutions.

Guided by past successful issuances by African public and private sectors, new African entrants in the green bond markets can reduce Africa’s trillion-dollar climate finance bill by creating ecosystems that leverage existing capacities in their public, private and environmental sectors.

To turn ambition and potential into concrete action, African countries and their partners will play an important role in enabling opportunities offered by the rapidly growing global sustainable bond markets.

At the upcoming COP29, states must commit to accelerating the creation of enabling environments, capacities and collaborations for green bond issuance in Africa.

Background and context

In 2007, the United Nations predicted that the African continent would be one of the regions most severely impacted by climate change. The 2023 State of the Climate in Africa report indicates that the risks have manifested on an even larger scale.¹ With the global surface temperature expected to exceed 1.5 degrees Celsius above pre-industrial levels, Africa’s climate bill is expected to further escalate.² ³ Going by past trends, a combination of African governments’ climate-related budgets and donor pledges will not meet this challenge. Estimates indicate that Africa needs USD 2.8 trillion by 2030 to implement its Nationally Determined Contributions (NDCs).⁴

To meet their trillion-dollar climate bill, African countries must diversify their climate finance sources to include more non-traditional avenues. Sustainable finance markets, for example, are platforms for debt securities that raise money for sustainable projects and initiatives globally. According to the International Finance Corporation (IFC) and Amundi, by 2023, the sustainable finance market in general – and green bonds in particular – continue to grow, making them a promising source of climate finance for the developing world.⁵ Despite this global growth, however, Africa’s share of the global USD 2.2 trillion green bond market is less than 1%.⁶ The impact of the ongoing climate crisis on the continent and its sheer wealth of natural capital make Africa a potential market for green bond proliferation.

What is a green bond?

A green bond is a fixed-income instrument, similar to a traditional bond, but specifically used to raise capital for projects that deliver positive environmental or climate benefits. First issued in 2007 by the European Investment Bank, green bonds direct funds toward sectors such as renewable energy, sustainable agriculture, water management and green infrastructure.⁷ Issuers of green bonds include governments, corporations, municipalities and international organisations, who must include a ‘use of proceeds’ clause in the bond to ensure that the funds are allocated to environmentally beneficial projects. ⁸ ⁹

In sum, what sets green bonds apart from traditional bonds is their focus on sustainability and climate outcomes. In addition to the ‘use of proceeds’ requirement, green bond issuers often seek third-party verification to validate the environmental credentials of their projects. This process involves regular reporting on the bond’s usage and environmental impact, ensuring transparency and accountability. Green bonds are issued and regulated based on national frameworks and voluntary international guidelines that align with global climate goals, such as the Paris Agreement and the UN’s Sustainable Development Goals (SDGs).¹⁰ Certification of green bonds ensures that they meet best practices for reporting, tracking and compliance with environmental objectives. Key initiatives, such as ICMA’s Green Bond Principles and the CBI’s Climate Bonds Standard, help standardise issuance. Alignment with these international standards further strengthens the integrity of green bonds.¹² ¹³ Global agreement on eligibility criteria and reporting remains essential to avoid greenwashing and ensure credibility.¹⁴ ¹⁵ ¹⁶

An overview of the global green bond market

The global green bond market has experienced exponential growth, surging from under USD 50 billion in 2015 to approximately USD 2.8 trillion in 2023, with USD 575 billion issued in 2023 alone (see Fig. 1).¹⁷ ¹⁸ This growth has been driven largely by the increasing demand for climate-positive investments following the Paris Climate Accord, as investors and issuers alike prioritise sustainability.

The market has seen a diversification of issuers, including corporations, municipalities, banks and sovereign governments. This broad participation underscores the widespread appeal of green bonds as a tool for financing environmental projects. Regulatory developments are also playing a significant role, with governments introducing guidelines and taxonomies to support market growth and ensure the integrity of green finance.¹⁹ ²⁰ As a result, green bonds now dominate the sustainable finance space, with rising demand signaling their central role in addressing the climate crisis.

Figure 1: Green bonds dominate global growth of impact bonds instrument (2014-2023)

Source: Bloomberg. (2023). Green bonds reached new heights in 2023. https://www.bloomberg.com/professional/insights/trading/green-bonds-reached-new-heights-in-2023/

In 2023, green bonds grew exponentially, accounting for 73% of overall bond issuances in emerging markets and 68% in advanced markets.²¹ Despite the growth in emerging markets, 70% of green bond issuances since 2012 have come from advanced economies, with China leading the pack at USD 292 billion.²² Unlike advanced markets, emerging market bond issuers in 2023 combined green and social projects, reflecting a broader commitment to all of the SDGs. The growth of green bonds globally has been driven by various factors including national climate contributions, investor demand in sustainable projects and macroeconomic factors.²³²⁴

An overview of the green bond market in Africa

In spite of the global surge of green bond issuances, sub-Saharan private and public sectors have not fully benefited from this source of climate finance.²⁵ As the figure below shows, the continent represents only USD 5.1 billion of the total USD 2.2 trillion green bond market, compared to USD 47.2 billion for Asia Pacific (minus China) and USD 48 billion for Latin America. See Fig. 2.

**Figure 2:** Value of green bonds issued in emerging markets in 2023 by region

Low liquidity and underdeveloped capital markets across Africa have limited the potential of the green bond market. Despite this challenge, green bond issuances grew by 125% in 2023, reaching USD 1.4 billion, up from USD 600 million in 2022.²⁶ One of the latest and biggest sovereign sustainable bond issuances in 2024 is the Côte d’Ivoire USD 1.1 billion Sustainability Bond,²⁷ which will be used for eligible green projects in line with the ICMA 2021²⁸ and CBI 2023²⁹ Green Bond Principles.

As of 2024, Africa had issued over 20 green bonds in countries such as Tanzania, Rwanda, Gabon, Seychelles, Nigeria, South Africa, Kenya, Morocco, Mozambique, Namibia, Mauritius and Zambia.³⁰ ³¹ The green bonds issued in Africa have funded climate mitigation and adaptation projects, including renewable energy, forestry, sustainable agriculture, sustainable water and clean transport projects.³²

Selected examples of African green bond issuances: 2013 – 2024

Country	Use of Proceeds	Issuer	Amount Issued (USD)	Year
Africa	Renewable Energy Clean Transport Biosphere Conservation Water Solid Waste Management	AfDB	USD 500 million	2013
South Africa	Energy, Transportation	Johannesburg Municipality	USD 137.8 million	2014
Nigeria	Energy	Government of Nigeria	USD 29.7 million	2017
Nigeria	Forestry	Federal Government	USD 30 million	2017
Namibia	Energy, Transportation	Financial Institution	USD 4.6 million	2018
Seychelles	Marine and Fisheries Projects	Seychelles Government	USD 15 million	2018
Kenya	Buildings	ACORN Project	USD 40.9 million	2019
South Africa	Energy	Nedbank	USD 116 million	2019
South Africa	Water, Energy, Buildings	Standard Bank Group	USD 200 million	2020
Gabon	Nature Conservation	Bank of America	USD 500 million	2023
Zambia	Renewable Energy	Copperbelt Energy Corporation	USD 200 million	2023
Côte d’Ivoire	Sustainable Projects	Government of Côte d’Ivoire	USD 1.5 billion	2024
South Africa	Conservation, Urban Infrastructure	Cape Town Municipality	USD 135 million	2019
Morocco	Renewable Energy	Moroccan Agency for Sustainable Energy	USD 103 million	2020

Green bond development in Africa

The African Development Bank (AfDB) has become a pioneer for sustainable financing in Africa,³³ issuing its first green bond of USD 500 million in October 2013. Several more issuances have followed, including the latest 2023 USD 50 million 15-year Kangaroo Green Bond.³⁴ Other countries have followed suit. South Africa led the African market’s early development with its sustainable finance taxonomy and green listing rules introduced in 2017. This enabled Cape Town to issue its first green bond for climate change mitigation and adaptation, followed by municipal green bonds worth over USD 74 million. Johannesburg allocated USD 138 million for similar bonds.³⁵

While South Africa has pioneered green bonds in Africa, Nigeria dominates the public issuance of green bonds. In 2017, Nigeria issued its first green bond to fund solar power and afforestation projects.³⁶ This was the first bond certified by climate bond standards, and today Nigeria accounts for approximately 99% of green bonds listed on the Nigerian Stock Exchange. Private firms, such as Access Bank, North-South Power Company and the Infrastructure Credit Guarantee Company, have followed the government’s lead.³⁷

Meanwhile, African countries such as Morocco, Namibia and Kenya have issued corporate green bonds with government guidance. Morocco’s first green bond was issued by the Moroccan Agency for Solar Energy. In 2023, Africa saw further, important debut issuances such as the Rwanda Development Bank’s sustainability-linked bond (SLB), Gabon’s blue bond through a ‘debt-for-nature swap’, and Zambia’s first corporate-led green bond from Copperbelt Energy Corporation.³⁸

To accelerate Africa’s green bond market, in 2023 the African Development Bank signed a joint partnership with the Global Green Bond Initiative to promote green bonds across the continent.³⁹ Additionally, the International Finance Corporation and Amundi have launched a USD 2 billion fund to purchase green bonds from emerging markets, including Africa.⁴⁰ These instances reflect African institutions’ growing recognition of green bonds as vital to unlocking climate finance.

Lessons from the Zambia case

Over the past 30 years, climate change has cost the Zambian economy an estimated USD 13.8 billion in GDP losses.⁴¹ In addition, Zambia’s GHG emissions rose by 47% between 1994 and 2016, emphasising the need for a low-carbon development path.⁴² According to the World Bank, Zambia’s national income could decline by 4.8% to 8% by 2050 as a result of chronic climate damage.⁴³ In 2023, Zambia responded by issuing its first-ever green bond, seen as a key tool for enhancing environmentally positive activities and climate resilience.⁴⁴ Before this issuance, Zambia faced several challenges including a lack of awareness, guidelines, customised incentives, green bond ratings and a pipeline of suitable projects.⁴⁵ To address the challenges, a working group led by the UNDP Biodiversity Finance Initiative, in collaboration with various government ministries and WWF Zambia, developed green bond guidelines and hosted workshops to raise awareness amongst potential issuers. The Zambia Green Bonds Guidelines were gazetted in 2020 under the Securities Act.⁴⁶ In 2023, Copperbelt Energy Corporation (CEC) issued Zambia’s first green bond worth USD 200 million, which was oversubscribed by 178%.⁴⁷ Investing in renewable energy projects, the bond was supported by investors such as ABSA Bank and the Africa Local Currency Bond Fund. The bond is aligned with the EU Taxonomy, and CEC is committed to annual impact reporting based on ICMA Green Bond Principles.⁴⁸ In 2022, with support from ZANACO, FCDO and WWF Zambia, the Women Leaders for Climate Action (WLCA) was formed to build the capacity of more market players on green and gender bond issuances. This included training on green bonds issued across Africa, including Zambia.⁴⁹

Growing the green bond market in Africa: challenges and lessons

Despite its growth potential, the African green bond market faces several challenges. Its potential has been demonstrated by countries like Nigeria and South Africa, which have successfully issued green bonds multiple times. Key issuance barriers and lessons learned include:

Challenges	Lessons
Lack of Developed Local Markets: Low awareness among African investors hampers demand for green bonds.⁵⁰ ⁵¹	Raising awareness and offering tax incentives, like Zambia’s green bond tax incentives and Cape Town’s experience, can drive demand.
Inadequate Green Bond Regulation: Without clear guidelines, investors face difficulties identifying green projects, leading to greenwashing risks.	Governments in Nigeria and South Africa established clear green bond standards, earning high ratings like GB1 from Moody’s, boosting investor confidence.⁵²
Limited Environmental, Social, and Governance (ESG) Capacity: Potential issuers often lack knowledge of ESG regulations, affecting sustainability reporting.	Investing in internal ESG capacity and leveraging external expertise has helped countries like Nigeria, South Africa, and Kenya build capacity for green bond issuance.⁵³ ⁵⁴
Underdeveloped Capital Markets & Project Pipeline: African green projects are often too small to attract large investors.	Zambia’s Capital Markets Development Plan and WWF Zambia’s creation of a green finance unit helped address these issues by identifying bankable projects linked to NDC objectives.⁵⁵ ⁵⁶
High Transaction Costs: Costs related to certification and verification deter issuers.	Zambia’s regulators reduced issuance costs by 50%, and countries like Nigeria provided partial credit guarantees to lower capital costs.⁵⁷ ⁵⁸
Lack of Independent Verifiers: The absence of local verifiers raises costs for issuers.	African actors have relied on international verifiers, with some costs covered by grants from development partners.⁵⁹

These lessons highlight the potential for overcoming barriers to green bond market growth across Africa.

Conclusion and call to action at COP29

Even though Africa has the lowest CO2 emissions in the world, its economy is reeling from climate change-induced water, energy and food crises. Trillions of dollars are needed to address these challenges. Green bonds are an important and under-utilised instrument that can aid in the financing of Africa’s climate adaptation goals. As there is no shortage of economic sectors on the continent in need of greater resilience, the opportunity for scaling green bonds in Africa is enormous.

However, creating a green bond market requires strong and consistent collaboration between public and private sectors and between local and international financial institutions. This will unlock financing opportunities for projects producing environmental, social and commercial outcomes for all parties. Several African countries have already demonstrated that the continent can overcome the barriers currently limiting their market share of the global green bond market. By harnessing and leveraging existing capacities in the public, private and development sectors, more African countries will see increased green bond issuances.

Governments, financial institutions, municipalities, investors and corporations at the upcoming COP29 must commit to accelerating the creation of enabling environments, capacities and collaborations for green bond issuance in Africa. COP29, hosted by Azerbaijan, is poised to be historic if parties to the United Nations Framework Convention on Climate Change (UNFCCC) implement a radically different strategy to unlock the finance needed to confront the climate crisis. Creating a finance strategy which incorporates green bonds will unlock the trillions of dollars Africa needs to combat climate change and thrive. In summary, Africa’s under-utilised green bonds market may be the key to help it bridge its trillion-dollar climate finance gap. By scaling up the green bond market, critical climate projects can be funded to unlock Africa’s potential for sustainable development and resilience, with governments, businesses and international institutions driving the shift.

Endnotes

[1] World Meteorological Organization (WMO). (2024). State of the Climate in Africa 2023 (p. 33 p.). WMO. https://library.wmo.int/records/item/69000-state-of-the-climate-in-africa-2023

[2] Ibid

[3] Climate Policy Initiative. (2022). The State of Climate Finance in Africa: Climate Finance Needs of African Countries. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/06/Climate-Finance-Needs-of-African-Countries-1.pdf

[4] World Economic Forum. (2023). COP28: Bridging the climate finance gap in Africa and beyond. https://www.weforum.org/agenda/2023/12/cop28-bridging-the-climate-finance-gap-in-africa-and-beyond/

[5] International Finance Corporation, & Amundi Asset Management. (2024). Emerging Market Green Bonds. IFC, Amundi. https://www.ifc.org/content/dam/ifc/doc/2024/emerging-market-green-bonds-2023.pdf

[6] African Development Bank. (2023, November). Global Green Bond Initiative joins the African Development Bank to strengthen green bond markets in Africa. AfDB. https://www.afdb.org/en/news-and-events/press-releases/global-green-bond-initiative-joins-african-development-bank-strengthen-green-bond-markets-africa-66491

[7] weADAPT. (2024). An Introduction to Green Bonds. weADAPT. https://weadapt.org/knowledge-base/climate-finance/an-introduction-to-green-bonds/

[8] Ibid

[9] Tuhkanen, H. (2020). Green Bonds: A Mechanism for Bridging the Adaptation Gap? SEI Working Paper, February 2020. Stockholm Environment Institute, Stockholm. https://www.sei.org/publications/green-bonds-a-mechanism-for-bridging-the-adaptation-gap/

[10] Tolliver, C., Keeley, A. R., & Managi, S. (2019). Green bonds for the Paris agreement and sustainable development goals. Environmental Research Letters, 14(6), 064009. https://doi.org/10.1088/1748-9326/ab1118

[11] weADAPT. (2024). An Introduction to Green Bonds. weADAPT. https://weadapt.org/knowledge-base/climate-finance/an-introduction-to-green-bonds/

[12] Ibid

[13] FSD Africa. (2020). Africa Green Bond Toolkit. https://www.fsdafrica.org/wp-content/uploads/2020/08/Africa_GBToolKit_Eng_FINAL.pdf

[14] Ibid

[15] weADAPT. (2024). An Introduction to Green Bonds. weADAPT. https://weadapt.org/knowledge-base/climate-finance/an-introduction-to-green-bonds/

[16] EY. (2022). Green Bonds Brochure. https://www.ey.com/content/dam/ey-unified-site/ey-com/en-zm/documents/ey-green-bonds-brochure.pdf

[17] Bloomberg. (2023). Green Bonds Reached New Heights in 2023. https://www.bloomberg.com/professional/insights/trading/green-bonds-reached-new-heights-in-2023/

[18] International Finance Corporation, & Amundi Asset Management. (2024). Emerging Market Green Bonds. IFC, Amundi, pp. 26. https://www.ifc.org/content/dam/ifc/doc/2024/emerging-market-green-bonds-2023.pdf

[19] Falchi, G. (2023). Greening African Finance: Barriers to Issuing Green Bonds and How to Overcome Them. Florence School of Banking and Finance. https://fbf.eui.eu/greening-african-finance-barriers-to-issuing-green-bonds-and-how-to-overcome-them/

[20] International Finance Corporation, & Amundi Asset Management. (2024). Emerging Market Green Bonds. IFC, Amundi. https://www.ifc.org/content/dam/ifc/doc/2024/emerging-market-green-bonds-2023.pdf

[21] Taghizadeh-Hesary, F., Zakari, A., Alvarado, R., & Tawiah, V. (2022). The green bond market and its use for energy efficiency finance in Africa. China Finance Review International, 12(2), 241–260. https://doi.org/10.1108/CFRI-12-2021-0225

[22] International Finance Corporation, & Amundi Asset Management. (2024). Emerging Market Green Bonds. IFC, Amundi. https://www.ifc.org/content/dam/ifc/doc/2024/emerging-market-green-bonds-2023.pdf

[23] Tyson, J. E. (2021). Developing green bond markets for Africa. Overseas Development Institute. https://odi.cdn.ngo/media/documents/Policy_Brief_3_FINAL_.pdf

[24] International Finance Corporation, & Amundi Asset Management. (2024). Emerging Market Green Bonds. IFC, Amundi. https://www.ifc.org/content/dam/ifc/doc/2024/emerging-market-green-bonds-2023.pdf

[25] White & Case. (2024). White & Case advises banks on Republic of Côte d’Ivoire’s US$1.1 billion inaugural sustainability and US$1.5 billion vanilla bonds issuances and tender offer. White & Case. https://www.whitecase.com/news/press-release/white-case-advises-banks-republic-cote-divoires-us11-billion-inaugural

[26] International Capital Market Association. (n.d.). Green Bond Principles (GBP). https://www.icmagroup.org/sustainable-finance/the-principles-guidelines-and-handbooks/green-bond-principles-gbp

[27] Climate Bonds Initiative. (n.d.). Climate Bonds Initiative. https://www.climatebonds.net/

[28] Ibid

[29] International Finance Corporation, & Amundi Asset Management. (2024). Emerging Market Green Bonds. IFC, Amundi. https://www.ifc.org/content/dam/ifc/doc/2024/emerging-market-green-bonds-2023.pdf

[30] Taghizadeh-Hesary, F., Zakari, A., Alvarado, R., & Tawiah, V. (2022). The green bond market and its use for energy efficiency finance in Africa. China Finance Review International, 12(2), 241–260. https://doi.org/10.1108/CFRI-12-2021-0225

[31] Vichi, J. (2023, December 22). Looking back on 10 years of AfDB green bonds. https://www.luxse.com/blog/Sustainable-Finance/10-years-of-AfDB-green-bonds

[32] African Development Bank. (2023). African Development Bank issues AUD 50 million 15-year Kangaroo Green Bond due March 2038. https://www.afdb.org/en/news-and-events/press-releases/african-development-bank-issues-aud-50-million-15-year-kangaroo-green-bond-due-march-2038-59576

[33] Taghizadeh-Hesary, F., Zakari, A., Alvarado, R., & Tawiah, V. (2022). The green bond market and its use for energy efficiency finance in Africa. China Finance Review International, 12(2), 241–260. https://doi.org/10.1108/CFRI-12-2021-0225

[34] Policy Development Facility Phase II. (2020). Nigeria: Sovereign green bonds for climate action. https://www.pdfnigeria.org/rc/wp-content/uploads/2020/01/P3387_PDFII_stories_of_change_GREEN_BONDS_PRINT_WEB.pdf

[35] Ibid.

[36] International Finance Corporation and Amundi Asset Management. (2024). Emerging Market Green Bonds 2023 (6th ed., p. 32). https://www.ifc.org/en/insights-reports/2024/emerging-market-green-bonds-2023

[37] African Development Bank. (2023). Global Green Bond Initiative joins with African Development Bank to strengthen green bond markets in Africa. https://www.afdb.org/en/news-and-events/press-releases/global-green-bond-initiative-joins-african-development-bank-strengthen-green-bond-markets-africa-66491

[38] Taghizadeh-Hesary, F., Zakari, A., Alvarado, R., & Tawiah, V. (2022). The green bond market and its use for energy efficiency finance in Africa. China Finance Review International, 12(2), 241–260. https://doi.org/10.1108/CFRI-12-2021-0225

[39] World Bank. (2019). Climate-smart agriculture investment plan: Zambia. https://climateknowledgeportal.worldbank.org/sites/default/files/2020-06/CSAIP_Zambia_1.pdf

[40] Silolezya, R. H. (2024). Sustainability strategy: Highlights from Zambia’s $10bn Green Growth Strategy [LinkedIn]. https://www.linkedin.com/pulse/sustainability-strategy-highlights-from-zambias-10bn-rabecca-1no3f/

[41] World Bank. (2024). Zambia: Financing a green future. Retrieved from https://documents1.worldbank.org/curated/en/099609403082438794/pdf/IDU1020a52f61a0a1bced12116d34df35c.pdf

[42] United Nations Development Programme. (2024). Green bonds: A new frontier in Zambia’s sustainable path. https://www.undp.org/zambia/news/green-bonds-new-frontier-zambias-sustainable-path

[43] Mweemba, B. N. (2021). Green bonds: Sustainable investments in Zambia becoming a reality. BIOFIN. https://www.biofin.org/news-and-media/green-bonds-zambia

[44] Sakuwaha, S. (2022). Green and Sustainable Finance in Zambia – Part 2: Moira Mukuka. https://www.moiramukuka.com/green-and-sustainable-finance-in-zambia-2/#:~:text=To%20promote%20integrity%20in%20the,41%20of%202016

[45] LuSE. (2023). Lusaka Securities Exchange’s 2023 Fourth Quarter Market Performance (p. 6). https://www.luse.co.zm/wp-content/uploads/2024/03/LuSE-2023-Q4-Market-Performance.pdf

[46] Invest Africa. (2023, December 29). Copperbelt Energy has announced that the first tranche of the US$200 million green bond programme was oversubscribed by over 178%. https://invest-africa.squarespace.com/insights-and-news/copperbelt-energy-has-announced-that-the-first-tranche-of-the-us200-million-green-bond-programme-was-oversubscribed-by-over-178

[47] FSD Africa. (2023). The Women Leaders for Climate Action takes the lead in advancing sustainable finance through green and gender bonds capacity building for financial players in Zambia. https://fsdafrica.org/press-release/the-women-leaders-for-climate-action-takes-the-lead-in-advancing-sustainable-finance-through-green-and-gender-bonds-capacity-building-for-financial-players-in-zambia/

[48] EY. (2022). Global green bonds market is gaining traction: Will it gain ground in Zambia? EYGM Limited. https://www.ey.com/content/dam/ey-unified-site/ey-com/en-zm/documents/ey-green-bonds-brochure.pdf

[49] Falchi, G. (2023). Greening African finance: Barriers to issuing green bonds and how to overcome them. Florence School of Banking and Finance. https://fbf.eui.eu/greening-african-finance-barriers-to-issuing-green-bonds-and-how-to-overcome-them/

[50] Ibid

[51] United Nations Development Programme. (2024). Green bonds: A new frontier in Zambia’s sustainable path. https://www.undp.org/zambia/news/green-bonds-new-frontier-zambias-sustainable-path

[52] Brennan, A. (2024, June 19). Green bonds and sustainable finance in African markets. African Leadership Magazine. https://www.africanleadershipmagazine.co.uk/green-bonds-and-sustainable-finance-in-african-markets/

[53] World Bank. (2024). Zambia: Financing a Green Future. World Bank. https://documents1.worldbank.org/curated/en/099609403082438794/pdf/IDU1020a52f61a0a1bced12116d34df35c.pdf

[54] Moses. (2023). WWF Zambia and FNB Zambia partner to bridge the green financing gap. Solwezi Today. https://solwezitoday.com/wwf-zambia-and-fnb-zambia-partner-to-bridge-green-financing-gap/

[55] United Nations Development Programme. (2024). Green bonds: A new frontier in Zambia’s sustainable path. https://www.undp.org/zambia/news/green-bonds-new-frontier-zambias-sustainable-path

[56] EY. (2022). Global green bonds market is gaining traction: Will it gain ground in Zambia? EYGM Limited. https://www.ey.com/content/dam/ey-unified-site/ey-com/en-zm/documents/ey-green-bonds-brochure.pdf

[57] Falchi, G. (2023). Greening African finance: Barriers to issuing green bonds and how to overcome them. Florence School of Banking and Finance. https://fbf.eui.eu/greening-african-finance-barriers-to-issuing-green-bonds-and-how-to-overcome-them/

About the author

Nachilala Nkombo is a multi-award-winning climate finance advocate and sustainability leader with over 20 years of experience leading highly successful conservation and sustainable development initiatives in several African markets. She is the Founder of Women Leaders on Climate Action (WLCA) and Country Director for Bridges to Prosperity Zambia. She holds a bachelor’s degree in Economics from the University of Zambia and a Master’s degree in Public Policy from the University of Potsdam in Germany.

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Finance

Bank of America’s 18,000 financial advisors just got a new AI tool as the company posts a record quarter | Fortune

Published

4 hours ago

April 16, 2026

Press Room

Bank of America’s 18,000 financial advisors just got a new AI tool as the company posts a record quarter | Fortune

Good morning. Bank of America posted its strongest earnings in nearly two decades, and CFO Alastair Borthwick says AI is becoming key to the bank’s performance.

The bank reported on Wednesday that Q1 2026 net income was $8.6 billion, with earnings per share up 25% to $1.11, which is the highest level in almost 20 years. On a media call, Borthwick pointed to AI as an increasingly important driver, highlighting a new internal tool for financial advisors.

The Meeting Journey tool helps advisors prepare for client meetings by pulling together key information. BofA has about 18,000 financial advisors across its wealth management platform, serving millions of clients, he said. Before meeting with a client, advisors regularly need to update themselves with a wide range of information such as client history, recent activity, and CIO guidance, he explained.

The tool searches and consolidates client relationship insights and recent activity into ready-to-use prep materials and, with client consent, acts as an AI notetaker during virtual meetings. It also summarizes meeting decisions and next steps based on those notes. The goal is to cut down hours of manual prep and free advisors to focus on client relationships.

“Efforts like this translate into results,” Borthwick said, pointing to record first-quarter revenue and improved cost control.

Preparing for meetings once meant pulling data from multiple systems; now much of that work is automated, he said. “Not necessarily the judgment—that can be human,” Borthwick added. The bank invests around $13.5 billion annually in technology, including approximately $4 billion on new initiatives like AI.

More broadly, BofA’s strong quarter was driven by several factors:
—Net interest income rose 9% to $15.9 billion as loan and deposit growth accelerated.
—Trading revenue hit $6.3 billion—its best in roughly 15 years—boosted by a record high 30% jump in equities.
—Investment banking fees climbed 21% to $1.8 billion on a solid M&A market.
—Asset management fees grew 15% to $4.2 billion.
—Productivity gains, including from AI, helped the company maintain cost discipline and improve its efficiency ratio by 170 basis points to 61%.

With revenues outpacing expenses, BofA achieved its third consecutive quarter of operating leverage at 2.9%. This week, Morningstar raised its fair value estimate for BofA to $65 per share, up from $58.

Amid ongoing uncertainty around geopolitics, rates, and credit, Borthwick said the bank’s data shows a resilient U.S. consumer. Unemployment remains at around 4.3%, supporting spending, while a recent rise in gas outlays hasn’t materially changed the broader picture, he said. “You can see that in our asset quality,” he added.

Sheryl Estrada
sheryl.estrada@fortune.com

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Christopher Filiaggi was appointed interim CFO of Corebridge Financial, Inc. (NYSE: CRBG), effective April 24. Filiaggi, chief accounting officer of Corebridge since 2023, will serve as interim CFO while the company prepares for its planned merger with Equitable Holdings, Inc. This appointment follows the previously announced transition of CFO Elias Habayeb. Prior to his current role, Filiaggi held finance leadership positions with Corebridge and American International Group, Inc.

Sean McCabe was appointed CFO of Cineverse, an entertainment technology company (Nasdaq: CNVS), effective April 20. He succeeds Mark Lindsey, with whom the company is in discussions to transition into a senior financial consulting role. McCabe previously served as VP and corporate controller at Cineverse in 2023 and 2024. He returns from Freestar, an ad-tech company, where he led accounting and finance teams and worked on mergers and acquisitions, treasury, and capital structure optimization. Before joining Freestar and Cineverse, McCabe held controller positions at Jukin Media, Fulgent Genetics, and National Grid.

Big Deal

BridgeWise’s inaugural “State of AI for Wealth in 2026” report finds that 78% of respondents globally are using AI tools for investment-related queries, with nearly half (45.7%) emerging as power users, consulting AI “always” or “often” when seeking investment information. The global study is based on 2,100 respondents across 19 countries.

The report also introduces a Global Wealth AI Optimism Index, a proprietary benchmark that evaluates the 19 included countries through four weighted pillars: adoption (AI usage frequency), confidence (trust in AI accuracy), edge (perceived competitive advantage when using AI for investing), and momentum (intent to replace traditional investment research with AI).

Going deeper

“From wool sneakers to GPUs: Allbirds’ desperate AI pivot and 600% stock surge, explained” is a Fortune article by Phil Wahba.

On Wednesday, Allbirds, a sustainable footwear brand, “announced that it had secured $50 million in financing to turn itself into a tech company with a ‘long-term vision to become a fully integrated GPU-as-a-service (GPUaaS) and AI-native cloud solutions provider’ and that it would change its name to NewBird AI,” Wahba writes. You can read more here.

Overheard

“When people understand how their work drives the company’s value, they act like owners: they innovate, they solve problems, and they stay.”

—Vicente Reynal, chairman, president, and CEO of Ingersoll Rand, writes in a Fortune opinion piece titled “Here’s how employee ownership helped drive more than 8x enterprise value growth.”

Finance

Buyers snap up homes for $200,000 under asking price as ‘fear and mystery’ grips Aussie property

Published

16 hours ago

April 15, 2026

Press Room

Buyers snap up homes for 0,000 under asking price as ‘fear and mystery’ grips Aussie property

Buyers are reporting making ‘lowball’ offers and having some success. (Source: REA/Getty)

When George Cherchian attended an open home in Sydney’s west recently, he was on the look out for one thing. A key detail would indicate how much competition he would have in vying for the house.

He attended every inspection for the property prior to the scheduled auction date. And when he didn’t see it, the buyers agent knew he was in a good position.

“I went to every single open home, and what I look for there is essentially the same faces. So if I’m seeing your face at every open I go to for one particular property, it tells me that you are just as interested in it as my clients are, or as I am,” he told Yahoo Finance.

“But that wasn’t the case here, we didn’t have any sort of repeat faces.”

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In the end, he put an offer in ahead of the planned auction date. Despite it being considerably lower than the advertised asking price, the vendor ultimately accepted it.

On behalf of the buyer, he secured the Baulkham Hills property for $1.9 million, $200,000 below the $2.1 million asking price.

Cherchian explained that in this particular case the vendor was in a position “where they couldn’t really afford to defer the settlement” as they had to sell because they had committed to buying another property.

But as “caution” grips property markets in Australia’s capital cities thanks to rising interest rates, higher fuel prices, ongoing uncertainty with the Iran war and impending policy changes around the taxation of investment properties, Cherchian said the sale is emblematic of the opportunities buyers can find right now in a less competitive market.

“Now that there are not as many buyers to contend with, there’s almost a bit of a window of opportunity for those who are able to make a decision,” he told Yahoo Finance.

Overall, he said many buyers in Sydney were showing increased “caution” during so much uncertainty. As a result, “the things that need to transact, they are transacting at a discount”.

An auction for an Australian house with limited interest. — It’s been years since buyers were perceived to have much leverage in most Aussie housing markets. (Source: Getty)

Auction clearance rates in Sydney and Melbourne dropped in March, with the most recent results from April showing a clearance rate of just 54 per cent in Sydney, according to Domain, about 10 per cent lower than at the same time last year.

Dwelling prices went backwards in Sydney and Melbourne in the March quarter this year, according to property data giant Cotality. Prices fell 0.6 per cent in Melbourne and 0.2 per cent in Sydney.

Meanwhile this week, ANZ cut its forecast for capital city property price growth to be below inflation in 2026 in the face of weak consumer confidence, rising interest rates and the Middle East war.

“There are still some who recognise that uncertainty can create opportunity. They’re asking whether this is a chance to secure better terms, and in some cases, it is,” Cherchian said.

“It is definitely is a good time, especially for first time buyers” who don’t need to time a sale with an existing property.

NSW broker Nathan Linton who works further north of the city, told Yahoo Finance of a similar success story recently for one of his clients that he got approved in November but had been struggling for months to secure a property.

“I’m having clients that are having success buying at reasonable prices, probably because there’s less competition at the moment,” he said, pointing to a backdrop of “fear and mystery”.

“This particular client, we did a quick digital evaluation (on a desired property), and it was worth $1.4 million. And he’s gone in there, attended the auction, and they let it go for $1.21 million,” he told Yahoo.

“I think the good news story that people kind of like to hear sometimes is that there’s still opportunity. And maybe in a market where everyone’s scared, it’s a good time to be buying because you can have a bargain.”

Linton runs a subreddit called ‘Asked a Broker’ where he shared the recent anecdote and was met with similar stories from other Aussies.

“We just bought ours … for $300k under what it last sold for a few years ago!” one Melbourne buyer commented.

“We lowballed not expecting anything and were happy to walk away given all the uncertainty but they said yes. Definitely a lot of fear out there.”

Nathan Linton (left) and George (right) pictured. — Nathan Linton (left) and George Cherchian (right) say buyers can get lucky with a bargain at the moment. (Source: Supplied)

While rising interest rates crimp borrowing power, Linton also agreed the current conditions could help first home buyers with a big enough deposit.

The broker said rising interest rates will impact buyers a little differently depending on their profile. As an example, each standard increase of 0.25 per cent in the RBA’s official cash rate would mean:

A single person with an income of $100,000 and no dependents would see their borrowing capacity reduced by $12,000.
A married couple with one child and a household income of $200,000 would see their borrowing power reduced by about $25,000 for each interest rate hike.

The higher the borrowing amount the bigger the overall numerical impact, he noted, with most banks and brokers in the industry indicating the average home loan would see borrowing capacity reduced by $25,000 to $30,000 with each 0.25 interest rate increase.

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Finance

Mastercard’s $1.8 billion bet heralds the collapse of financial silos

Published

1 day ago

April 15, 2026

Press Room

Mastercard’s .8 billion bet heralds the collapse of financial silos

Key insight: Mastercard’s acquisition of BVNK was a hedge against irrelevance. It suggests that the companies that defined the last era of finance are now preparing for a very different future.
What’s at stake: Many of today’s financial institutions will not survive in their current form.
Forward look: Banks, brokerages and payment firms still possess enormous advantages in customer trust, regulatory expertise and distribution. The question is whether they transform quickly enough to remain central to the financial system, or end up on the outside looking in.

When Mastercard recently announced it would acquire stablecoin infrastructure firm BVNK for up to $1.8 billion, it wasn’t just another banking headline. It was a massive, flashing signal. One of the most entrenched players in global payments is preparing for a world where money doesn’t move through traditional rails at all.

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For years, financial institutions treated blockchain as a hedge, not a priority. They launched pilot programs, stood up innovation labs and issued press releases, but stopped short of meaningful integration. The goal wasn’t to transform their businesses. It was to signal they wouldn’t be left behind.

Now these firms are writing billion-dollar checks to ensure they won’t be.

The Mastercard news is the latest evidence that blockchain infrastructure is quietly becoming real financial infrastructure.

JPMorganChase’s blockchain-based payments network, now called Kinexys by J.P. Morgan, has processed more than $1.5 trillion in transactions and moves billions of dollars daily for institutional clients across currencies and time zones. What started as an internal project now operates as a 24/7 settlement network using real corporate payments and liquidity flows.

At the same time, asset managers are bringing investment products onto blockchain rails. BlackRock has launched tokenized funds, expanded digital asset offerings, and is building teams around tokenization, stablecoins and market structure — not as pilots, but as business lines intended to scale globally. These products allow assets like Treasury bills to move digitally, shrinking the gap between cash management and markets that increasingly operate around the clock.

These examples and others represent an uncomfortable truth: Many of today’s financial institutions will not survive in their current form.

Today’s traditional financial system is built around silos. Increasingly, technology is making these structures obsolete.

Consumers bank in one place, invest in another, make payments through separate networks, borrow through specialized lenders and store assets somewhere else entirely. Behind the scenes, each layer extracts value and charges users (even though services appear “free”) through fees, spreads, settlement delays and execution costs.

Credit card networks take a percentage of every purchase. Brokerage platforms advertise commission-free trading while monetizing customer order flow behind the scenes. Banks profit from deposit spreads while offering customers minimal yield. Settlement between institutions can still take days, tying up liquidity across markets.

Mastercard’s business exists because of those silos. They connect banks, merchants and consumers across fragmented systems, and take a fee at every step.

These structures persist not because they are necessary, but because they have been profitable.

Blockchain infrastructure changes that.

When money, securities and collateral move on shared digital rails, entire layers of reconciliation and settlement complexity can disappear. Payments, investing, lending and asset management no longer need to operate as separate businesses. They can become integrated features of unified financial platforms. In that world, shifting from cash into government bonds or stocks becomes a near instant digital exchange rather than a multiday process involving brokers, custodians and clearinghouses.

That convergence has already begun. BlackRock’s expansion into tokenized funds reflects a recognition that assets themselves will move across interoperable rails, where currency and collateral operate within the same system rather than across fragmented intermediaries.

At the same time, systems like JPMorgan’s Kinexys show how money itself is beginning to move on those same rails, enabling real-time payments, liquidity transfers and settlement within a single infrastructure layer.

The BVNK acquisition points to something larger than crypto adoption. It shows that even the companies that built the existing financial rails now expect those rails to evolve or be replaced. Additionally, some analysts now believe AI-driven agents will route payments through stablecoins by default, selecting the cheapest and fastest rails automatically without regard for legacy networks, accelerating adoption even further.

Many incumbent institutions have legitimate concerns about stability, compliance and consumer protection. Financial infrastructure requires trust. Yet it is also true that parts of the industry have strong incentives to slow structural change. Banks benefit from low-cost deposits and spreads that could shrink in a world where digital dollars move more freely. Payment networks have built lucrative businesses around interchange fees that lower-cost settlement rails could compress. Brokerage models rely on execution and order-flow economics that become harder to sustain in markets operating continuously on shared infrastructure.

The legislative debate around crypto that has stalled in Congress illustrates this tension. Some of this debate is about risk and consumer protection, but a key underlying issue is whether digital dollars should be allowed to provide users yield directly. Banks rely on low-cost deposits and earn by investing that money while customers receive little interest in return. If stablecoin providers can offer dollar-backed assets that move freely across digital networks and also pay competitive yields, deposits could migrate away from traditional banks.

Mastercard’s move isn’t a bet on crypto hype. It’s a hedge against irrelevance. The news suggests that the companies that defined the last era of finance are now preparing for a system where value moves more quickly, cheaply and across shared infrastructure.

Industries rarely disappear overnight, but they can and they do evolve. Banks, brokerages and payment firms still possess enormous advantages in customer trust, regulatory expertise and distribution. The question is whether they transform quickly enough to remain central to the financial system, or end up on the outside looking in.