A Cognizance of Green Bond Features Preferential to Renewable Energy Project Financing in Ghana

Abstract

Issuance of green bonds (GBs) is valuable for developing countries because it provides a market deepening mechanism, which enables greater liquidity for investments in Renewable Energy (RE) sector. This paper is premised on the outlook for the first GB in Ghana. The study investigates the features of GBs, which investors prioritise as preferential for RE financing (REF). Employing the literature, twelve beneficial features of GBs were identified and formed the based for a questionnaire, which was handed to experts in financial institutions to complete. Data were analysed and ranked with the relative importance index and other statistical tests. The findings illustrated that low-interest rates, similar payback period, economic convenience and transparency issuance are among the top preferential features for feasible green bond rollouts in Ghana. Findings implied that akin to other worldwide cases for renewable energy financing, GBs represent a degree of flexibility, which stems from the homogeneity in their respective features. The study illustrates the specific priorities, which must be considered by potential investors. Resultantly, enabling GBs issuers to develop GB packages that suit the needs of the investment community and ultimately contribute to RE targets' achievement.

Editorial Entrepreneurial Finance for Green Innovative SMEs

“…Finally, even where green SME innovation policies exist, multiple issues in terms of extra financial support, investment selection, funding availability, and market conditions will affect their outcomes, as reflected in this special issue call and its introductory IEEE paper [30] and the resulting papers presented in this special issue (see [4], [9], [32], [34], [35], [36], [45]). These papers offer important contemporary insights into what we know and what we need to know in order to improve the availability of green innovation financing that can transform the current global economy into a desirable future sustainable environment and society.…”

“…They offer quantitative and qualitative data insights, drawn mainly from more mature OECD economies that have long established private and public financing mechanisms that form the operation of their evolving green innovation investment escalators [31]. The exception is Owusu-Manu et al [35], whose paper presents an initial insight into how green bonds (GBs) might be most effectively introduced into Ghana's developing African economy to stimulate much-needed foreign investment into the country's low-carbon economy, including for green innovating SMEs. The remaining papers examine the countries which are mature and major polluters and which are able to afford mitigating impact investments.…”

“…The remaining three papers are quantitative. Two address the wider issues of SME finance to adopt green practices, whilst the third paper by Owusu-Manu et al, [35] relates specifically to the Paris 2015 call for the reduction of greenhouse gases ostensibly through financing the expansion of renewable energy (RE) infrastructure. Cowling and Lui [9] use the U.K. national Small Business Survey (SBS) of SMEs, drawing on the waves of data collected between 2007 and 2012 to provide a substantial-size grouped data set of 9894 valid employer SME (1-249 employee) observations.…”

“…Owusu-Manu et al [35] examine how green bonds (GBs) might be introduced to assist Ghana's developing low-carbon economy, through their potential as a wholesale financing instrument to encourage international and national investment into developing the country's strategically vital renewable energy (RE) sector. Whilst RE from thermal, hydro and solar power provides all of Ghana's electricity, there has been more than a 50% increase in demand for electricity during the last decade and there is significant forecast demand for a major investment into new RE infrastructure over the next decade in order to provide national energy security.…”

Challenges and Pathways of Low-Carbon Oriented Energy Transition and Power System Planning Strategy: A Review

“…Ref. [114] investigated the features of green bonds, which investors prioritize as preferential for renewable energy financing. The findings illustrated that low-interest rates, similar payback periods, economic convenience and transparency issuance are among the top preferential features for feasible green bond rollouts.…”