Green Bonds as a Sustainable Way of Financing Green Projects in Cameroon

Posted: 10 Sep 2016

See all articles by Professor Alain Ndedi

Professor Alain Ndedi

International Council for Family Business; YENEPAD; Saint Monica University; University of Johannesburg; University of Pretoria; Charisma University

Mau Kingsly

Harvard University - Harvard Kennedy School (HKS)

Moutila Luc

University of Douala;Cameroon Ecology (CamEco); LT Edéa

Date Written: September 8, 2016

Abstract

The explosive growth of green bonds in the capital markets is increasingly attracting attention from investors. In simple terms, a bond is a debt instrument with which an entity raises money from investors to obtain capital while the investors receive fixed income in the form of interest. With green bond, the issuer of a bond publicly states that capital is being raised to fund ‘green’ projects, which typically include those relating to renewable energy with emission reductions. Thus, green bonds are created to fund projects that have positive environmental and/or climate benefits, but with lower interests. Therefore, why should an investor get excited with lower interest in green bonds? Because green bonds inherently carries lower risk than other bonds and proceeds are raised for specific green projects, but repayment is tied to the issuer, not the success of the projects.

Cameroon has embarked on an ambitious target of building multi gigawatt of renewable energy capacity projects that requires a massive FCFA billion in funding. Further, Cameroon has big goals in terms of renewable energy installations, but a big hurdle has been financing and the cost of financing. For the recent past, budget allocations have been insufficient.

The paper is structured around three parts. The first part defines the concept of green bonds. The second part describes the depth of renewable infrastructure requirements in Cameroon, especially in areas of huge thick forests. The third part provides a roadmap for issuing sustainable green bonds by the Cameroonian government.

Keywords: Green Bonds, Cameroon, Forest

Suggested Citation

Ndedi, Alain Aime and Ndedi, Alain Aime and Kingsly, Mau and Luc, Moutila, Green Bonds as a Sustainable Way of Financing Green Projects in Cameroon (September 8, 2016). Available at SSRN: https://ssrn.com/abstract=2836473

Alain Aime Ndedi (Contact Author)

International Council for Family Business ( email )

San Diego
United States

YENEPAD ( email )

PO Box 30069
Suunyside
Pretoria, Pretoria 0135
South Africa
+27 84 992 9499 (Phone)

HOME PAGE: http://yenepad.virtualactivism.net

Saint Monica University ( email )

P.O. BOX 132
Buea, South West
Cameroon
237698727474 (Phone)
23767992-0777 (Fax)

HOME PAGE: http://www.stmonicauniversity.com

University of Johannesburg ( email )

UJ ADMINISTRATION. University of Johannesburg
PO Box 524. Auckland Park 2006.
Johannesburg, Gauteng
South Africa

HOME PAGE: http://www.uj.ac.za

University of Pretoria ( email )

University of Pretoria,
Private Bag X20, Hatfield,
Pretoria, Gauteng
South Africa

HOME PAGE: http://www.up.ac.za

Charisma University ( email )

30 Sandcastle Rd
Neptune CT, Grace Bay
Providenciales
Turks and Caicos Islands

Mau Kingsly

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Moutila Luc

University of Douala;Cameroon Ecology (CamEco); LT Edéa ( email )

PO Box 3132 Douala
PO Box 081 EDEA
Douala - Ndogbong, CA Littoral
Cameroon
+237 655822967/ 675380418 (Phone)

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