Green Bonds from Mauritius

In the space of barely a decade, Green Bonds have gone from being an esoteric fringe product to a mainstream product in the international capital markets.

Social Bonds, a more recent innovation, are also gaining momentum and are expected to expand rapidly as the race to reduce the inequality gap gathers pace.

Social Bond issuances have been garnering increasing attention since the outbreak of the Coronavirus pandemic in early 2020, especially with investors seeking to achieve positive social outcomes while also achieving financial returns.

The funds raised by Sustainable Bonds can be mobilised with traditional bonds. Being labelled as “Green” or “Blue” or “Climate or “Social” or “Sustainability”, however, allows Sustainable Bonds issuers to potentially benefit from:

• Investor diversification and the opportunity to tap into new markets

• Closer engagement with investors

• Increased corporate awareness / reputation

• Improved internal processes and awareness with regard to sustainability

• Government support and incentives

As for investors, labelled bonds are a way for them to easily and effectively support climate- smart or social investments through liquid instruments without giving up financial returns.

Sustainable Bonds constitute financial instruments aimed at supporting sustainable development by raising capital to finance or re-finance Green or Social or Sustainability-linked projects.

In general, Sustainable Bonds can be distinguished from regular bonds by the specific use of the funds raised. Thus, in addition to evaluating the standard financial characteristics (such as maturity, coupon, price, and credit quality of the issuer), investors also assess the specific environmental and/or social purposes of the projects that the bonds intend to support.

The Bond Universe

GREEN BOND

A Green bond is a debt instrument which facilitates capital-raising and investments into new and/or existing qualifying Green projects which have environmental benefits and can mitigate risks associated with climate change.

BLUE BOND

A Blue bond is a subset of Green Bonds, where funds raised are used for the financing of marine and coastal ecosystems, in line with SGD 14 (Life Below Water) related to conversation and sustainability of the oceans, seas and marine resources.

CLIMATE BOND

A Climate Bond is a subset of green bonds, where the proceeds are directed to projects/assets that have specific climate benefits.

SOCIAL BOND

A Social Bond is one where the proceeds of the bond are used for projects and assets with positive social outcomes such as health care and education.

SDG BOND

A Sustainability Bond, also known as an SDG Bond is one that is used for the financing of a range of both social and environmental projects/assets. A SDG Bond invests in projects and assets that are aligned and contribute to the achievement of the Sustainable Development Goals (SDGs).

Who can issue SDG Bonds?

There are no restrictions on the type of organisation that can issue Sustainable Bonds. Issuers may be States, State corporations, supranational institutions and generally, subject to domestic requirements, any legal entity which can issue a bond may also engage in the issue of Sustainable Bonds.

For more information, please contact us by email on info@shouholdings.com