MINISTER of Housing, Urban Renewal, Environment and Climate Change Pearnel Charles Jr has lauded the launch of the Green Bond Project — the first of its kind in the Caribbean — which he says represents a watershed moment for the country.
The project, titled Facilitating an Enabling Environment for the Caribbean Green Bond Listing on the Jamaica Stock Exchange, was undertaken to explore the debt capital market as a source of financing for climate resilience and low-carbon development in Jamaica.
Charles Jr, who was keynote speaker at the hybrid official launch ceremony held on Wednesday (June 23), commended the collaborative effort between the Climate Change division in the Ministry of Housing, Urban Renewal, Environment and Climate Change, and the Jamaica Stock Exchange (JSE) in this area of international importance.
“We have set out to reduce greenhouse gas emissions of 25.4 per cent by 2030 on our own, and 28.5 per cent, by that time, with international support. We are sending a very strong signal to our development partners that [in] Jamaica, we are taking charge of our development and advancement as a country [by] recognising the need for climate action,” Charles Jr said, noting that the eventual listings bring the country closer to realising its targets as per the National Development Plan, Vision 2030 Jamaica.
The objective of the readiness grant, which is receiving funding from the South Korean-based Green Climate Fund, is to strengthen the nation's commitment to climate action, as outlined in its Nationally Determined Contributions, through the development of innovative climate-financing strategies.
The minister further pointed out that climate bonds have been used successfully by the World Bank and in countries in Europe, Africa and Asia. He indicated that green bond issuance accounted for US$161 billion worth of investments worldwide in 2017, according to global rating agency Moody's, and US$257.5 billion in 2019 according to investor-focused non-profit group Climate Bonds Initiative.
JSE's Managing Director Marlene Street Forrest said the Green Bond Project represents a tangible and proactive approach by the Government to build the necessary structures for environmental resilience through collaboration.
“This project is expected to be transformative for Jamaica and the Caribbean. Not only are we exploring and designing frameworks for the measurement and certification of green [ecosystems], we are also ensuring that we direct capital flow into our region… that's very important for us,” she added.
According to project lead and JSE Group Business Development Manager Andre Gooden, by the end of 2021 JSE will complete a comprehensive green bond market assessment as well as develop its listing standards and guidelines.
“We will then usher in 2022 with market education and training of our respective stakeholders…and then close the curtains on the project this time next year in the summer of 2022 with the listing of a green bond on the Jamaica Stock Exchange,” Gooden said
He added, “Green bonds are really no different from your typical bonds, however the proceeds of these debts instruments are invested exclusively in clearly defined, climate-related environmental projects. There's also an additional requirement of transparency, and accurate reports of the use and management of the proceeds must be available to investors and to the public.”