BIOFIN Zambia is driving the transformation of green finance with the launch of three key financial solutions

On 7 and 8 February 2024, BIOFIN Zambia took a decisive step with the launch of three financing solutions derived from Zambia’s Biodiversity Finance Plan. These solutions are poised to revolutionize Zambia's green finance landscape thanks to the collaborative efforts of the Green Finance Mainstreaming Working Group (Working Group). The Working Group is made up of key players in the Zambian financial sector, including the Bank of Zambia, the Pensions and Insurance Authority and the Securities and Exchange Commission. In addition, the working group has strategic participation from the Ministry of Green Economy and Environment, the Ministry of Finance and National Planning, the Zambian Institute of Chartered Accountants, and the Worldwide Fund for Nature Zambia.

Below are the three ground-breaking financial solutions, each accompanied by the presentation of inception reports by dedicated consultants, signaling a new era in green finance.

Workstream 1 - Development of Zambia's National Green Finance Strategy and Implementation Plan

This workstream focuses on the formulation of Zambia's National Green Finance Strategy, a key initiative designed to deliver practical and innovative green finance solutions and mechanisms. The strategy aims to drive Zambia's green finance agenda and provide much needed financial impetus to biodiversity conservation efforts. From BIOFIN's perspective, this strategy aims to find solutions that not only serve biodiversity conservation but also address critical challenges related to climate change and land degradation.

Workstream 2 - Green Bond Market Development

Building on the success of the recent debut green bond by the Copperbelt Energy Corporation, valued at $200 million, this workstream is designed to further strengthen the green bond market in Zambia. BIOFIN has played a key role in the establishment of this market. The newly launched workstream will focus on reducing transaction costs and utilizing the proceeds for biodiversity conservation and broader environmental objectives. In addition, the working group aims to develop a Green Bond Investment Portal for Zambia to facilitate the development of the pipeline. It will also provide technical assistance to selected potential green bond issuers.

In the photo: The BIOFIN team with members of the CEC Plc board and management and other stakeholders during the bell ringing ceremony to commemorate the listing of CEC Plc’s Green Bond on the Lusaka Securities Exchange at Intercontinental Hotel in Lusaka, Zambia on the 12^th of January 2024.

Workstream 3 – Green Finance Taxonomy, Tagging and Reporting system.

This workstream will initially work on the development of Zambia's national taxonomy for green finance, which should have a balanced weighting between biodiversity conservation and climate change. This strategic approach is particularly important as many taxonomies tend to disproportionately favor climate change. Once finalized, the taxonomy will form the basis for the development of labelling and reporting systems for the public, private and financial sectors.
With the finalization of these workstreams, Zambia will be well positioned to support the development of further financing solutions and ultimately improve green financing for most of its development activities.