ASHENEWS reports experts confirming that Zambia needs capacity-building and policy guidelines to stimulate the green market, especially as the country strives to reposition itself as a preferred global green investment hub.
By Alfonso Kasongo
As highlighted in the Capital Market Master Plan (CMMP), which aims to objectively develop new and innovative capital market products that integrate sustainability, experts also confirm that the growth of the green finance market in the country has been slow.
On December 5, 2023, the Copperbelt Energy Corporation (CEC) group announced the registration of the first green bond with the Securities and Exchange Commission on the sidelines of the COP 28 Climate Summit in Dubai.
Registering the $200 million worth of green bonds was expected to trigger more investment in the green finance sector.
However, the Climate Finance Awareness Symposium on green finance for sustainable agriculture, organized by the Indaba Agricultural Policy Research Institute (IAPRI), has exposed Zambia’s inadequacies in growing the green finance market despite significant strides made.
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The symposium highlighted the need for policy actualization, information on climate financing, and capacity building around green bonds if the country is to stimulate its green market effectively.
The Bank of Zambia (BoZ) observes that the country faces numerous challenges in growing the green market, among them poor participation, lack of effective guidelines, and inadequate capacity.
The country’s central bank, therefore, says it is moving aggressively to develop capacity and guiding policies to enhance the local green market and effectively participate in global green financing opportunities.
BoZ Senior Analyst for Regulatory Policy Research and Licensing, Dr. Oswald Mungule, disclosed that most commercial banks in the country face challenges in implementing green loans, hence the central bank’s intention to develop supporting guidelines to enhance market supervision.
Dr. Mungule further mentioned that a well-developed green market is critical for farmers to be resilient in times of climatic shocks, such as the recent drought which triggered 100 percent crop failure in 84 districts of the country.
“There are many global opportunities, and green funds are in abundance. We hope that by developing supervision guidelines and capacity building, we will open the green market for full participation,” Dr. Mungule said.
According to Securities Exchange Commission (SEC) Analyst and Inspector Kalima Chileka, a lack of awareness and knowledge gap in the green market, along with issues of standardization, continue to adversely affect the growth of the green finance sector.
Chileka observed with concern: “We need to seek external opinions to certify if the project to be undertaken conforms to green project standards.”
The Copperbelt Energy Corporation (CEC) group, the first Zambian firm to register green bonds on the country’s capital market, says there is a serious need for policy realignment and actualization to grow the market.
CEC Senior Corporate Manager for Project Finance, Lizzy Muwowo, also stressed the need to incentivize the green market to enhance green projects.
“At the time we wanted to seek the green loan, one of the challenges was the lack of actualized policy. We need to actualize policies,” Muwowo disclosed.
Meanwhile, the Manager of Market Development for Pensions at the Pension and Insurance Authority (PIA), Aaron Mukuwa, highlighted the registration gaps, saying, “Statutory Instrument Number 50 is silent with regards to participation.”
Mukuwa advised the need for capacity and expertise development.
