Rwanda’s Capital Market Authority (CMA) issued new guidelines for public issuance of Green, Social, Sustainability (GSS+) bonds and other labels to enhance progress in sustainable finance. This comes at a time when the local capital market is making changes aimed at spurring sustainability efforts as investors become more aware of the systemic risks posed by climate change. ALSO READ: RSE launches guidelines to foster sustainability compliance, disclosure in capital market Rwanda Stock Exchange launched Environment, Sustainability, Governance (ESG) Disclosure Guidance to foster the integration of sustainability compliance among listed and non-listed companies in the Rwandan market, in December 2024. The local bourse also saw the launch of Sustainability-Linked bonds and green bonds from private sector actors that were oversubscribed, signalling increased awareness and investor interests in sustainable finance. The GSS+ Bond Guidelines provide a regulatory framework for the public issuance and listing of GSS+ bonds within Rwanda’s jurisdiction, according to officials, complementing existing legislation and regulations governing debt securities, ensuring a cohesive and robust approach to sustainable finance. Thapelo Tsheole, the CMA Chief Executive Officer, said that the guidelines focus on public issuance and do not cover private issuance of sustainable bonds or multi-jurisdictional issuance of GSS+ Bonds. He said the framework seeks to create securities that are internationally credible, replicable, and attractive to global investors. “The GSS+ Bonds Guidelines draw from international principles established by organizations such as the International Capital Markets Association (ICMA) and the Climate Bonds Initiative (CBI), aligning Rwanda’s sustainable finance efforts with global best practices,” he added. According to the guidelines’ document, at least 75 per cent of the proceeds from bond may only be used in the funding of eligible projects, and the issuer may have the option for buy-back arrangements of the face value of the bonds from any investor after a lock-in period of three years. “An issuer of a GSS+ bond shall, where applicable, endeavour to comply with Rwanda's sustainable Taxonomy–requirements for the portion of the proceeds designated for eligible projects,” the guidelines’ document reads. The green taxonomy is a classification system that clarifies environmentally sustainable activities, to help catalyse private financing to green projects. CMA holds the power to require the removal of the GSS+ label from an approved GSS+ Bond where it is noted that there has been sustainability washing or the GSS+ Bond has ceased to meet the prescribed eligibility requirements, it added.
