Author: Makafui Kuffo
Over the past few years, the impact of climate change in our world has led to the introduction of several approaches to ensure environmental sustainability. One key approach among the several measures has been the concept of green finance which seeks to ensure that more financial resources are channeled into investments that are environmentally sustainable. In the global real estate sector, the momentum for green finance has been on the rise with multinationals such as BlackRock and Aviva focusing on investment portfolios that are green.
With these advancements around the world, the response to the global call to promoting sustainable investments has admittedly been at a slow pace in the African market. Presently, there are about 641 green buildings in Africa. Out of the 641 green buildings in Africa, Ghana has 10, representing 1.5% of the total green buildings in Africa. Although this is a good start for Ghana, clearly there still remain much work to be done in terms of green finance in Ghana.
Many Ghanaians have in the past expressed worry about the potential of maintaining a constant supply of green buildings due to the cost burden of green buildings at the start. Although many are pessimistic about the easy adaption to the culture of sustainability, the Ghanaian government has shown dedication to the promotion of green investments through green bonds. This follows the announcement of the development of green bonds in Ghana by the International Finance Corporation (IFC) and the Securities and Exchange Commission (SEC). This is a step in the right direction towards the promotion of green investments in Ghana.
With the introduction of green bonds, Ghanaian investors would be incentivized to channel their funds into environmentally sustainable investments which would in turn lead to the generation of funds to finance real estate developments that are sustainable. Green bonds have the potential of curbing the cost burden associated with the development of sustainable buildings.
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