Green Bonds Offer Hope, And Risk, In Africa's Climate Fight
It only took two days for Nigeria to raise $59 million through green bonds -- part of a funding drive for climate and environmental projects in a nation still hooked on oil.
Africa remains a small player in the green bond market, and the debt instrument is underused -- but it is becoming a fast-growing source of funding for the world's poorest continent, which is at the forefront of climate change.
Green bonds are similar to sovereign bonds: Investors are paid interest on what is essentially a loan to the government, but in this case the money funds environmentally friendly projects.
But the continent's investment risk profile means that countries pay a high interest rate to borrow money.
Nigeria is paying 19-percent interest on the green bonds it issued earlier in June. By comparison, France is paying three-percent interest on its latest green bonds.
Nigeria's recent fundraising round is slated to put money into a slew of renewable energy, eco-friendly housing, conservation and infrastructure projects.
"Nigeria is a continental leader in the African green bond market," Lagos-based law firm Udo Udoma & Belo-Osagie told AFP in a note.
"However, to unlock the full potential of green bonds, especially in Africa, we need stronger regulatory frameworks, better project pipelines, capacity-building for issuers and enhanced investor confidence."
The continent accounted for only about $5 billion of the 2.2 trillion global green bond market in 2023, according to data from the Africa Policy Research Institute.
But that came on the back of a 125 percent increase in issuances that year and "significant growth" in the market, it said.
Nigeria was the first African state to issue sovereign green bonds, selling $30 million in 2017 and then another $41 million in 2019.
The west African nation was following an example set by Johannesburg in 2014, when the South African municipality paved the way on the continent by issuing nearly $140 million in green bonds to investors.
Since then, Kenyan developer Acorn Holdings issued east Africa's first green bonds in 2019, raising more than $40 million to finance what it called environmentally friendly student housing.
Tanzania's CRDB Bank launched its first green bonds in 2023, raising $300 million for financing renewable energy as well as infrastructure and water supply projects.
The biggest coup came last year in Ivory Coast, where $1.5 billion was raised.
Yet the continent remains underfinanced, with Nairobi-based nonprofit FSD Africa blaming "unstable macroeconomic conditions," a risky political and business environment and "a shortage of bankable green projects".
Currency depreciation and high inflation also create risks for investors. In response, governments have to offer "a risk premium to attract investors."
China and the United States, the world's two biggest polluters, dominate the green bond market as they seek ways to fund their energy transitions.
Their leadership is not surprising "given that they are carbon-intensive economies who have contributed more in the global climate crisis," said Alex Oche, an environmental law expert at Nigeria's Institute for Oil, Gas, Environment, Energy and Sustainable Development.
Africa is responsible for just roughly four percent of global emissions that contribute to climate change.
Yet its poorer countries remain some of the least prepared to deal with the fallout of successive crises, from erratic rainfall to shifting fishing stocks, linked to rising global temperatures.
"The future of green bonds in Africa and globally is promising, but it will depend heavily on credibility, innovation and inclusive growth," said law firm Udo Udoma & Belo-Osagie.
Beyond an influx of cash, a better regulatory framework is also needed, experts said.
Razaq Fatai, a researcher for Nigerian consulting firm Vestance, studied previous projects financed by green bonds and warned that several appeared to resemble "greenwashing" -- including a reforestation project in Oyo state where "the community was not involved" in the planning.
"After a couple of years, most of the trees were dying," he said.
"If you continue to do that, continue to spend money like that, you just end up just wasting public resources, and then you have to pay interest on those debts that we encourage."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Int'l Business Times
a day ago
- Int'l Business Times
How Zaki Gabe-Wilkinson Is Changing the CFO Role Through AI
Zaki Gabe-Wilkinson began his career at Citigroup and Morgan Stanley, where he gained firsthand experience with institutional finance. He later joined edtech company Multiverse to build out its finance function, reporting directly to the CFO. His work there included strategic finance, operational modeling, and corporate development. During this time, he frequently observed finance professionals focusing on repetitive processes rather than strategic initiatives. In 2024, he co-founded Gekko AI, a London-based company that develops AI software to automate core financial planning and analysis (FP&A) tasks. The platform enables CFOs and their teams to move from reactive reporting toward more forward-looking strategic roles. Although headquartered in the United Kingdom, Gekko AI primarily serves U.S. mid-market companies that want efficient, data-driven systems to streamline financial operations. Addressing the Workload Bottleneck in Finance Modern finance teams are responsible for providing strategic insight while managing high volumes of data and reporting. Many teams still rely on spreadsheets and manual cycles during the month-end close, spending significant time on variance analysis, budget reconciliation, and performance summaries. Recent benchmarks show that half of finance teams take more than six business days to close their books, with only 18 percent achieving a three-day close—highlighting persistent inefficiencies in the process. While AI offers significant potential, adoption has progressed slowly due to typical data accuracy, compliance, and usability concerns. Gabe-Wilkinson believes the right tools can resolve these concerns by aligning closely with finance teams ' operations. "This is not about adding more dashboards," he explains. "We need to build systems that reason through financial data and deliver insights with the precision of a human—only faster." Gekko AI addresses these needs by automating month-end reporting and streamlining the production of finance summaries. The platform helps teams operate more efficiently while enabling a deeper focus on collaboration and planning. How the Gekko AI Platform Works Gekko AI connects with a company's existing systems—such as ERP, CRM, and HRIS platforms—to extract, organize, and analyze operational and financial data. The system uses large language models to generate variance explanations, historical comparisons, and management-ready summaries that finance analysts would otherwise compile manually. "Gekko AI is built to fit within established workflows for fast integration," Gabe-Wilkinson says. "It helps finance teams stay focused and deliver results quickly." The company's team includes AI researchers from Oxford and Cambridge and professionals with operational finance backgrounds. Gabe-Wilkinson says this combination ensures that Gekko AI is technically advanced and practical. "We have built Gekko AI with a clear understanding of how finance teams work, not just how software engineers think they should," he adds. Partner-Led Development and Revenue Growth Gekko AI partnered with 20 mid-sized firms as early customers to shape the platform in real-world conditions. These companies provided feedback and helped refine the product based on live use cases. This development approach ensured that the platform addressed specific pain points encountered by finance professionals. Gekko AI now reports meaningful revenue traction is growing rapidly every month. Clients, particularly those backed by private equity, report greater speed and consistency in financial reporting. The company secured early backing from Entrepreneur First and several angel investors focused on enterprise software. Gekko AI expanded its engineering team in early 2025 and continues to grow its technical and commercial teams. Strategic Outlook and Product Roadmap Gabe-Wilkinson encourages finance professionals to spend less time on routine reporting and more time on strategic work. He points out that AI is already capable of analyzing code and generating structured business content—tasks that require far more complexity than producing a financial report. This belief continues to shape the direction of Gekko AI's platform. This aligns with broader industry trends. A recent Gartner survey found that 58 percent of finance functions now use AI, an increase of 21 percentage points from the previous year. The data reflects a rapid shift toward AI-driven financial operations. The company plans to introduce tools for forecasting, pricing analysis, and workforce planning, along with scenario modeling features that allow finance teams to evaluate options and adapt quickly. "We aim to give finance leaders more time and sharper tools to act faster, and focus on driving business performance," Gabe-Wilkinson adds. Shorter reporting deadlines and growing expectations are pushing CFOs to work faster and smarter—Gekko AI supports this by simplifying workflows and improving data use. AI Artificial intelligence
DW
a day ago
- DW
China's faltering economy in focus of WEF Tianjin meeting – DW – 06/27/2025
The world's second-largest economy is suffering from weak household consumption, and its auto industry is particularly vulnerable. Manuela Kasper-Claridge reports from the "Summer Davos" in Tianjin. "Even if we only walk, we are faster than others," says Sun as he laughs mischievously. He is using the run-walk imagery to describe the state of the Chinese economy compared to its competitors. The businessman had been doing well selling real estate in China. Still, he doesn't want to see his full name published because his business is currently not doing well. There are vacant properties all over, and many apartments are just too expensive. What about the future, what's next? Sun shrugs, suggesting that everything will turn out fine. The salesman in his fifties is hoping for some innovative signs from the government. Chinese Prime Minister Li Qiang is as optimistic as ever. He is speaking at the "Summer Davos 2025" conference in Tianjin, organized by the Switzerland-based World Economic Forum (WEF) and officially called the Annual Meeting of the New Champions. Around 1,700 participants from all over the world have traveled to the northern Chinese city and are listening with hope. China reported economic growth of 5.5% in the first quarter of this year. The second quarter also looks good, according to the Chinese premier. But many in China view the government's optimism with skepticism and prefer to save rather than spend their money right now. Walking through large shopping centers in Tianjin, it is impossible not to notice the nearly empty stores. Demand for watches, jewelry and designer handbags is low, and customers are few and far between. In the stylish showrooms of Chinese car manufacturers, most of the salespeople look bored as they stare at their mobile phones. The latest NIO electric car sits alone in its showroom. With no customers in sight, it doesn't look like anyone wants to give it a test drive. Even at a nearby hair salon, little is happening on a normal weekday. There are four stylists, but not a single customer. The lack of spending at home is hitting Chinese automakers particularly hard. Competition for market share is fierce, and because of that prices are in a free fall in some cases. Some brand-new vehicles are being sold at used-car prices, a practice called "zero mileage." "It is good for the consumers, they are getting cars at very reduced prices and get very advanced, competitive cars," says Killian Aviles, head of Asia Pacific Region for Dekra Group, a vehicle testing and inspecting company that is still doing good business in China with testing and consulting for the automotive industry. "At the same time the profit margins that the companies have, have been eroded," Aviles told DW. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Consolidation seems inevitable, and Aviles is not the only one who is convinced of this. "Only the strongest and healthiest will survive," he said. China could try and ease the situation by exporting more vehicles to Europe, but that would depend a lot on whether the Europeans allow such imports and do not further increase tariffs. Yet, a lot of experts don't think the Chinese economy's strong dependence on exports is a viable model for the future. "China actually realizes that the export-led growth era is over and, of course, it is still struggling with over-investment and excess production," says Diana Choyleva, a senior fellow at the Asia Society Policy Institute's Center for China Analysis. Choyleva, who specializes on China's economy and politics, is convinced that domestic consumption must increase to keep the economy going. At the same time, China wants to become a global market leader in as many industries as possible, and visitors are proudly shown select companies around Tianjin. The city is home to one of the world's busiest ports and is focusing on technology like robotics, among other things. One such company is the Siasun Robot factory, which uses the advertising slogan "Making the world better by Robotics." The company sells its industrial robots in 40 countries around the world, and its product range also includes robots used in the nuclear industry. However, its latest models aren't on display. Instead, they are only showing off standard machines like those used by the automotive industry. Still, the growth potential is enormous, a company production manager told DW. "Soon the robots will be building robots themselves," he enthuses. "Where will the people be then?" he asks rhetorically without answering. On the banks of the Hai River, which flows through Tianjin, many Chinese sit and enjoy picnics. Families with children, the elderly, and many young people are there, too. Some are dancing. At the same time, many restaurants around town are half-empty just like the shopping malls and showrooms earlier in the day. Perhaps the restaurants are just too expensive. Or perhaps right now many Chinese consumers would rather save their money for a rainy day. Whatever it is, their homemade food is likely just as tasty as anything they would get in a sit-down restaurant.
DW
a day ago
- DW
China's falterung economy in focus of WEF Tianjin meeting – DW – 06/27/2025
The world's second-largest economy is suffering from weak household consumption, and its auto industry is particularly vulnerable. Manuela Kasper-Claridge reports from the "Summer Davos" in Tianjin. "Even if we only walk, we are faster than others," says Sun as he laughs mischievously. He is using the run-walk imagery to describe the state of the Chinese economy compared to its competitors. The businessman had been doing well selling real estate in China. Still, he doesn't want to see his full name published because his business is currently not doing well. There are vacant properties all over, and many apartments are just too expensive. What about the future, what's next? Sun shrugs, suggesting that everything will turn out fine. The salesman in his fifties is hoping for some innovative signs from the government. Chinese Prime Minister Li Qiang is as optimistic as ever. He is speaking at the "Summer Davos 2025" conference in Tianjin, organized by the Switzerland-based World Economic Forum (WEF) and officially called the Annual Meeting of the New Champions. Around 1,700 participants from all over the world have traveled to the northern Chinese city and are listening with hope. China reported economic growth of 5.5% in the first quarter of this year. The second quarter also looks good, according to the Chinese premier. But many in China view the government's optimism with skepticism and prefer to save rather than spend their money right now. Walking through large shopping centers in Tianjin, it is impossible not to notice the nearly empty stores. Demand for watches, jewelry and designer handbags is low, and customers are few and far between. In the stylish showrooms of Chinese car manufacturers, most of the salespeople look bored as they stare at their mobile phones. The latest NIO electric car sits alone in its showroom. With no customers in sight, it doesn't look like anyone wants to give it a test drive. Even at a nearby hair salon, little is happening on a normal weekday. There are four stylists, but not a single customer. The lack of spending at home is hitting Chinese automakers particularly hard. Competition for market share is fierce, and because of that prices are in a free fall in some cases. Some brand-new vehicles are being sold at used-car prices, a practice called "zero mileage." "It is good for the consumers, they are getting cars at very reduced prices and get very advanced, competitive cars," says Killian Aviles, head of Asia Pacific Region for Dekra Group, a vehicle testing and inspecting company that is still doing good business in China with testing and consulting for the automotive industry. "At the same time the profit margins that the companies have, have been eroded," Aviles told DW. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Consolidation seems inevitable, and Aviles is not the only one who is convinced of this. "Only the strongest and healthiest will survive," he said. China could try and ease the situation by exporting more vehicles to Europe, but that would depend a lot on whether the Europeans allow such imports and do not further increase tariffs. Yet, a lot of experts don't think the Chinese economy's strong dependence on exports is a viable model for the future. "China actually realizes that the export-led growth era is over and, of course, it is still struggling with over-investment and excess production," says Diana Choyleva, a senior fellow at the Asia Society Policy Institute's Center for China Analysis. Choyleva, who specializes on China's economy and politics, is convinced that domestic consumption must increase to keep the economy going. At the same time, China wants to become a global market leader in as many industries as possible, and visitors are proudly shown select companies around Tianjin. The city is home to one of the world's busiest ports and is focusing on technology like robotics, among other things. One such company is the Siasun Robot factory, which uses the advertising slogan "Making the world better by Robotics." The company sells its industrial robots in 40 countries around the world, and its product range also includes robots used in the nuclear industry. However, its latest models aren't on display. Instead, they are only showing off standard machines like those used by the automotive industry. Still, the growth potential is enormous, a company production manager told DW. "Soon the robots will be building robots themselves," he enthuses. "Where will the people be then?" he asks rhetorically without answering. On the banks of the Hai River, which flows through Tianjin, many Chinese sit and enjoy picnics. Families with children, the elderly, and many young people are there, too. Some are dancing. At the same time, many restaurants around town are half-empty just like the shopping malls and showrooms earlier in the day. Perhaps the restaurants are just too expensive. Or perhaps right now many Chinese consumers would rather save their money for a rainy day. Whatever it is, their homemade food is likely just as tasty as anything they would get in a sit-down restaurant.
