London Stock Exchange welcomes first East African sustainability bond listing

London Stock Exchange welcomes first East African sustainability bond listing

In a significant move for Tanzania's capital markets, NMB Bank, a leading commercial bank in the country, has cross-listed its inaugural sustainability bond, the NMB Jamii Bond, on the London Stock Exchange. This listing is set to increase the bond's visibility to international investors, potentially broadening the investor base and improving bond liquidity.

Ruth Zaipuna, chief executive of NMB Bank, stated that the listing cements NMB Bank's position as a trailblazer in sustainability within African capital markets. The NMB Jamii Bond aims to increase investment into Tanzanian climate finance and development projects.

The successful issuance of the dual-tranche Jamii Bonds on the Dar es Salaam Stock Exchange last year is highlighted as an example of the growing capacity of local investors to meet the rising demand for climate and sustainability financing. The dual-tranche bond raised a total of TZS 400bn (€142m) from both local and international investors.

The cross-listing of the NMB Jamii Bond on the London Stock Exchange could enhance Tanzania’s access to climate finance by attracting foreign capital specifically earmarked for sustainable development and climate-related projects. Increased foreign investment availability would support the scaling of Tanzania’s development projects focused on environmental sustainability and climate resilience.

Such cross-listing also signals stronger transparency and regulatory compliance, which can boost investor confidence and lower the cost of capital for climate finance initiatives. Reduced funding costs and increased investor interest can accelerate project implementation timelines and expand the range of viable green infrastructure or social development projects within Tanzania.

The 2022 Landscape of Climate Finance in Africa report, commissioned by FSD Africa and others, reveals that private sector financing represented only 14% of all of Africa's climate finance from 2019 to 2020. The report also identified actual risk, perceived risk, and ticket sizes as factors dissuading private capital players. Recommendations were made to address this, including the use of blended financing structures, a focus on private insurance and partial guarantees, and capacity building within domestic finance institutions and developing a pipeline of investable opportunities.

While no specific announcements about NMB Jamii Bond are found in the provided data, other African financial instruments and projects backed by development finance institutions, such as EIB’s commitment to renewable energy infrastructure or XSML Capital’s financing of solar energy in Zambia, exemplify a regional trend towards leveraging capital markets for climate-related development funding.

Therefore, NMB Jamii Bond’s listing on the London Stock Exchange could be a significant catalyst for enhancing Tanzania’s climate finance landscape and advancing key development objectives by integrating international capital flows into domestic sustainable projects. For those interested in detailed official impact assessments or data on NMB Jamii’s recent bond activities, monitoring the NMB Group’s announcements or specific financial market news portals will be advisable.

Meanwhile, in another development, the renewable energy firm Renalfa has raised €315M from an EBRD-led investor group. CorPower Ocean has landed a €40m EU grant for a wave energy farm. The Resonance housing initiative has welcomed tenants, and the fund associated with it has closed. These developments further underscore the growing importance of sustainable finance and renewable energy in Africa.

[1] For more information on these projects, please refer to the original sources.

1. The cross-listing of NMB Jamii Bond on the London Stock Exchange could potentially expand the investor base for development finance, focusing on sustainable projects in Tanzania, as the increase in visibility attracts international investors.
2. NMB Bank's NMB Jamii Bond is specifically designed to boost investment into Tanzanian climate finance and development projects, supporting the energy transition and environmental sustainability in the country.
3. As shown by the success of the NMB Jamii Bond and other projects like EIB's renewable energy infrastructure and XSML Capital's solar energy financing in Zambia, there is a growing trend in Africa to leverage capital markets for climate-related development funding, signifying the importance of sustainable finance in the region.

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