Ghana Securities Industry (Green Bond) Guidelines 2024
Reference: SEC/GUI/003/03/2024

1. Background & Legal Foundation

Issuing Authority	Securities and Exchange Commission (SEC) of Ghana
Legal Basis	Sections 3 and 209 of the Securities Industry Act 2016 (Act 929), as amended by the Securities Industry (Amendment) Act 2021 (Act 1062)
Date of Issue	7th March 2024
Effective Date	Immediate upon issuance
International Alignment	Follows the Green Bond Principles (GBP) published by the International Capital Market Association (ICMA)

2. Objectives & Purpose

• Foster market integrity — Promote transparency and adequate reporting in the green bond market
• Channel capital to environmental projects — Disseminate information to allocate more funds to projects with positive environmental impact
• Develop the domestic green securities market — Facilitate growth of Ghana’s green finance ecosystem
• Maintain credibility — Ensure transparency, disclosure, integrity and quality of green securities
• Prevent ‘greenwashing’ — Stop bonds labelled as ‘green’ despite having exaggerated or no environmental benefits or where proceeds are not appropriately allocated

3. Scope & Application

Who must comply	Issuers of green bonds
Who qualifies as an Issuer	Public companies, external companies, supra-national institutions, local government authorities and statutory corporations
Regulatory framework	Must comply with these Guidelines, the Securities Industry Act, L.I. 1728 (SEC Regulations) and any applicable law
Existing Note Programmes	Issuers with approved programmes may issue green bonds under them, subject to submission of a Supplementary Prospectus or SEC determination
Exemptions	SEC may grant exemptions, partial exemptions or waivers under Section 210 of the Act

4. Core Requirements: The Four Pillars

4.1 Pillar 1: Use of Proceeds

Proceeds must finance projects with positive environmental impact.

If used for refinancing, the issuer must estimate the share of financing vs. refinancing, identify which projects/portfolios are refinanced and specify the look-back period.

Eligible Project Categories (Schedule 1):

• Renewable energy
• Energy efficiency
• Pollution prevention and control
• Environmentally sustainable management of living natural resources
• Environmentally sustainable land use
• Terrestrial and aquatic biodiversity conservation
• Clean transportation
• Sustainable water and wastewater management
• Climate change adaptation
• Circular economy adapted products, production technologies and processes
• Green buildings

Prohibited Projects (Schedule 2):

• Fossil fuel power generation (coal, oil, gas)
• Production or trade in Illegal/regulated substances under Ghanaian law or international convention
• Weapons and munitions trade
• Tobacco production/trade
• Gambling and casino enterprises
• Radioactive materials (except medical/measurement equipment)
• Unbonded asbestos fibers
• Drift net fishing (nets >2.5km)
• Harmful/exploitative forced or child labour
• Commercial logging in primary tropical moist forest
• Unsustainable forestry products
• Industrial processes related to fossil fuels (mining, extraction, refining)

4.2 Pillar 2: Process for Project Evaluation & Selection

The process must be clear, precise and transparent regarding:

• Objectives of projects and their environmental impact
• Eligibility criteria for projects
• Process for identifying and managing environmental risks

4.3 Pillar 3: Management of Proceeds

• Net proceeds must be credited to a dedicated account for the green bond project, or allocated to sub-projects, or tracked by the Issuer in an appropriate manner and attested through a formal internal process
• While the bond is outstanding, balances must be periodically adjusted to match allocations to eligible green projects
• The Issuer must disclose in the offer document: intended types of temporary placement for unallocated proceeds, and the ramp-up period to reach full allocation
• The external auditor must report on the internal tracking method and allocation of funds

4.4 Pillar 4: Reporting & Disclosure

Performance Measurement	Use quantitative and/or qualitative indicators; define relevant impact indicators; if changed, disclose with 12-month transitional period
Communication	Publicly available via website: project evaluation/selection procedures, monitoring procedures, fund allocation info, external evaluation report
Annual Reporting	Updated list of financed/refinanced projects with descriptions, amounts allocated, expected environmental impact and unused balances
Annual Report to SEC	Impact achieved by project, project category and on an overall basis
Comparability	Information must be comparable over time with consistent indicators

5. Independent Review Requirements

Mandatory Review	Independent external review of: (a) green nature of eligible projects before issuance, and (b) compliance with obligations
Reviewer Qualifications	Must be a qualified and independent expert, aligned with ICMA GBP
Submission	Opinion + Green Bond Framework submitted to SEC at time of issuance
Additional Assurance	Optional certification or green bond scoring/rating
Other Review Types	Verification (specific aspects against criteria defined by Issuer)
Due Diligence Report	Must include: objectives/scope, qualifications, independence declaration, methodology, conclusions/limitations, environmental impact assessment, alignment verification, material risk assessment

6. Approval Process

6.1 Pre-Issuance Requirements

• File draft information memorandum/prospectus (or pricing supplement for shelf programmes)
• Prospectus must comply with the Act, Companies Act 2019 (Act 992), L.I. 1728 and these Guidelines
• Approval by relevant bodies
• Structuring with advisors
• Credit rating (where necessary)
• Promotion and pricing

6.2 Identification of Projects (Green Bond Framework must disclose)

• Clear description of project types/categories and anticipated environmental benefits
• Selection methodology with criteria for qualitative evaluation
• Methodology for evaluating and financing projects
• Methodology for identifying and managing environmental risks
• Refinancing share and affected projects (if applicable)

Mandatory Declarations: Issuers must comply with mandatory declarations as specified in the Guidelines.

7. Continuous Disclosure Obligations

7.1 Periodic Information

• Use of funds raised (projects, amounts, schedule, unused balances)
• Environmental impacts in measurable terms based on predetermined indicators
• Comparison against expected impacts during evaluation phase
• Comparison against eligibility criteria in the Green Bond Framework

7.2 Immediate Disclosure Required For

Delay in timing of fund use	SEC, bondholders, securities exchange
Significant negative difference between expected and actual environmental impacts	SEC, bondholders, securities exchange
Change of external review provider	SEC, bondholders, securities exchange
Event impacting environmental performance or project feasibility	SEC, bondholders, securities exchange
Change in commitments requiring SEC prior approval	SEC, bondholders, securities exchange

8. Penalties & Enforcement

Breach of code, directive, guideline, or circular	(a) Action under Sections 118, 122, or 123 of the Act; (b) Administrative penalty of 50 to 20,000 penalty units; (c) Both
Additional measures	Any other administrative penalty or remedial action deemed appropriate by SEC
Criminal offences	If accused voluntarily offers compensation/restitution, SEC may settle without criminal proceedings under Section 207
Payment deadline	Within 7 days (or as specified by SEC) after order takes effect

9. Key Definitions

Green Bond	Any bond instrument where proceeds (or equivalent amount) are exclusively applied to finance/refinance eligible green projects, aligned with ICMA GBP
Green Washing / Green Wash	Green securities labelled as ‘green’ despite having exaggerated or no environmental benefits, or where proceeds are not appropriately allocated
Certification	Assurance by external third party on compliance with external reference/best practice
Green Bond Scoring/Rating	Evaluation of the Green Bond Framework by a rating agency or external third party
Issuer	As defined in the Securities Industry Act, 2016 (Act 929) — includes public companies, external companies, supra-national institutions, local government authorities and statutory corporations
Lead Manager	An Issuing House licensed by the Commission, responsible for arranging the issuance and managing the entire issue process

10. Schedules Summary

Schedule 1	Eligible Green Projects — detailed categories: renewable energy, energy efficiency, pollution control, sustainable agriculture, forestry, biodiversity, clean transport, water management, climate adaptation, circular economy, green buildings
Schedule 2	Sample Exclusion List — prohibited activities: illegal products, weapons, tobacco, gambling, radioactive materials, asbestos, drift net fishing, forced labour, unsustainable logging, fossil fuels
Schedule 3	Sample Structure for a Green Bond Framework — preamble, introduction, sustainability strategy, definitions, use of proceeds, project evaluation process, management of proceeds, reporting/disclosure, exclusion list annex, environmental and social management system annex

11. Critical Success Factors for Issuers

1. Develop a robust Green Bond Framework aligned with Schedule 3
2. Establish clear project evaluation and selection criteria with environmental impact objectives
3. Implement dedicated proceeds tracking mechanisms with external auditor oversight
4. Engage qualified independent reviewers before issuance
5. Commit to transparent, comparable, and timely reporting throughout the bond’s life
6. Avoid prohibited activities listed in Schedule 2
7. Maintain ongoing compliance with disclosure obligations and immediate reporting requirements

Conclusion

These Guidelines represent a significant step in Ghana’s sustainable finance journey, establishing a clear regulatory framework that aligns with international best practices while addressing local market needs. They create accountability mechanisms to ensure that ‘green’ labels genuinely reflect environmental benefits and protect investors from greenwashing.

Document prepared based on SEC/GUI/003/03/2024 | Ghana Securities Industry (Green Bond) Guidelines 2024