
Green Bonds in Zambia: Developing a Market to Mobilize Resources for Projects with Climate and Biodiversity Benefits
Charcoal is a significant source of household energy in many parts of Zambia and heavily contributes to deforestation. To advance the energy transition and conserve biodiversity, Zambia has developed its green bond market with support from the Biodiversity Finance Initiative (BIOFIN) of the United Nations Development Programme (UNDP).
Green bonds are fixed-income instruments, like other bonds, with the key difference that their proceeds must be exclusively used to finance sustainability projects.
In 2023, Copperbelt Energy Corporation (CEC) Renewables issued the first-ever green bond in Zambia. With two tranches issued so far, totalling USD 150 million, green bonds have helped CEC finance the development of two solar plants with a combined capacity of 196 megawatts (MW). By increasing renewable energy supply to the national grid, these projects help reduce demand for charcoal and support the achievement of Zambia’s National Biodiversity Strategy and Action Plan (NBSAP) target of reducing deforestation by at least 25%.