WAEMU Green Bond Scoping Report

The WAEMU Green Bond Scoping Report, published by FSD Africa in September 2022, evaluates the feasibility of developing a Green Bond market within the West African Economic and Monetary Union. The report identifies significant potential for sovereign and corporate issuance, particularly in energy, agriculture, and transportation, but highlights critical barriers including underdeveloped regional financial markets, a lack of government focus on climate-resilient regulatory frameworks, and limited technical capacity among stakeholders to meet international green standards. It recommends targeted capacity building, the development of harmonized regional guidelines, and the use of technical assistance and risk-transfer instruments to attract investors and build a pipeline of bankable green projects.

• The development of a Green Bond market in the WAEMU region is hindered by three primary barriers: the underdevelopment of the regional financial market compared to international standards, a lack of climate initiatives from national governments and industries, and low familiarity among stakeholders with international Green Bond requirements.
• There is a significant lack of government focus on climate change risks and a deficiency in regulatory frameworks to support decarbonization and climate resilience, which limits private sector participation in funding mitigation and adaptation projects.
• Green Bonds in the region face competition from concessional finance, as international donors often provide grants or low-interest loans for renewable energy projects, which can negatively impact the economic risk-return pricing for public Green Bond issuances.
• The WAEMU sovereign security market is underdeveloped and fragmented, with a shallow secondary market characterized by low liquidity and a dominance of buy-and-hold strategies by domestic banks.
• Corporate bond issuance in the region is subdued and faces obstacles such as a lack of transparency in reporting, high perceived credit risk, and crowding out by government securities, which are more attractive to the bank-dominated investor base.
• Energy is identified as the primary candidate for Green Bond financing due to its alignment with Nationally Determined Contribution (NDC) objectives, sector maturity, and the high need for funding, particularly for renewable energy projects like solar, wind, and hydro-power.
• Other sectors with strong potential for Green Bond issuance in the WAEMU region include clean transportation and waste management for sovereign issuers, agriculture for financial institutions, and low-carbon real estate for corporate issuers.
• The report highlights the success of the Nigerian Green Bond market as a benchmark, attributing its growth to sustained engagement with regulators, a structured implementation plan, and extensive capacity building for market participants.
• Benin's issuance of a Euro 500 million Sustainable (SDG) Bond in 2019 demonstrates the potential for labelled bonds in the region, though the government prefers Sustainable Bonds over Green Bonds due to wider sectoral coverage and social benefits.
• Political instability and security threats, particularly in the Sahel region (Mali, Burkina Faso, Niger), negatively impact investor confidence and credit ratings, hindering the flow of foreign direct investment needed for long-term infrastructure.

APA

FSD Africa (2022). WAEMU Green Bond Scoping Report. https://fsdafrica.org/wp-content/uploads/2025/05/WAEMU-Green-Bond-Scoping-Report-Updated-Eng-Final.pdf

Chicago

FSD Africa. WAEMU Green Bond Scoping Report. 2022. https://fsdafrica.org/wp-content/uploads/2025/05/WAEMU-Green-Bond-Scoping-Report-Updated-Eng-Final.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=WAEMU Green Bond Scoping Report |date=7 September 2022 |url=https://fsdafrica.org/wp-content/uploads/2025/05/WAEMU-Green-Bond-Scoping-Report-Updated-Eng-Final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2022waemu, author = {{FSD Africa}}, title = {{WAEMU Green Bond Scoping Report}}, institution = {FSD Africa}, year = {2022}, month = sep, url = {https://fsdafrica.org/wp-content/uploads/2025/05/WAEMU-Green-Bond-Scoping-Report-Updated-Eng-Final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }