Ghana’s Securities and Exchange Commission has assured investors that the country’s emerging green bonds market will not expose them to the painful losses suffered under the Domestic Debt Exchange Programme.
The assurance comes amid lingering investor anxiety following the restructuring of government bonds, which resulted in significant haircuts for both individual and institutional investors.
Speaking on the sidelines of the Ghana Green Bonds Market Development Programme in Accra, the Director-General of the SEC, James Klutse Avedzi, emphasized that the structure, purpose and risk profile of green bonds currently being developed are fundamentally different from government-issued debt instruments that were affected by the DDEP.
“Well, the DDEP actually was the bond issue by the government. In the past, when we were all in secondary school, we were taught that bills, bonds, security with the government are free. But the DDEP taught all of us… that it is not that.”
James Klutse Avedzi
According to Mr. Avedzi, that painful lesson has shaped a more cautious and transparent approach to the development of new bond instruments, particularly green bonds aimed at supporting Ghana’s transition to sustainable growth.
Green Bonds Focus on the Real Sector
The SEC Director-General explained that a key distinction between green bonds and the bonds restructured under the DDEP lies in their intended use and issuers. While the DDEP involved government borrowing to manage fiscal pressures, green bonds are being designed to finance productive economic activities led by corporate entities.
“This one is basically for the real sector, the corporate body, not for government,” he noted.
Green bonds are expected to channel funding into environmentally sustainable projects such as renewable energy, climate-smart agriculture, waste management, clean transportation and energy efficiency initiatives. By linking capital markets to real sector productivity, regulators believe the instruments can generate both financial returns and measurable environmental benefits.
Market observers say this shift could deepen Ghana’s capital market while supporting national climate commitments and private sector-led growth.
Strong Regulatory Oversight to Protect Investors
Mr. Avedzi stressed that the SEC will apply strict regulatory oversight to all green bond issuances to ensure investor protection and market integrity. He said the Commission’s role is not only to approve issuances but also to monitor compliance, disclosures and post-issuance performance.
“We will do our work to ensure that the investor’s interest is protected, so that when that bond is issued, the bond will trade well on the Ghana Stock Exchange,” he said, adding that the goal is for investors to “make your capital gain” over time.
The assurance is expected to boost confidence among investors who remain cautious after the DDEP experience. Analysts note that transparent disclosures, credible project pipelines and effective supervision will be critical to restoring trust and attracting long-term capital into the green bonds market.
Infrastructure Bonds and Green Qualification
Touching on government borrowing plans, Mr. Avedzi confirmed that authorities have announced intentions to issue more than GHS10 billion in infrastructure bonds. However, he clarified that whether such instruments would qualify as green bonds depends entirely on how they are structured and disclosed to investors.
“It depends on what you put in the prospectus. If it falls under the green bond, so be it. But for now, I don’t have that indication.”
James Klutse Avedzi
This clarification underscores the importance of clear use-of-proceeds frameworks, environmental impact reporting and alignment with internationally recognized green bond standards. Without these elements, infrastructure bonds may not meet the criteria required to be classified as green.
Rebuilding Confidence After the DDEP
The DDEP fundamentally altered perceptions about the risk-free nature of government securities in Ghana. For many investors, it was a sobering reminder that macroeconomic instability can affect even traditionally safe assets.
By drawing a clear line between government debt restructuring and corporate-led green bonds, the SEC hopes to prevent a spillover of mistrust that could undermine the development of sustainable finance instruments.
Mr. Avedzi reaffirmed the Commission’s mandate, stressing: “That is why the SEC is there—to protect the interests of the investor.”
Market participants say consistent messaging, policy credibility and regulatory vigilance will be essential as Ghana positions itself as a hub for green finance in West Africa.
Outlook for Ghana’s Green Bonds Market
The Ghana Green Bonds Market Development Programme is expected to lay the foundation for a robust pipeline of issuances that attract both domestic and international investors. With global appetite for sustainable investments rising, Ghana stands to benefit if confidence is firmly restored.
For investors still wary of bond investments, the SEC’s assurances signal a deliberate effort to ensure that the mistakes and shocks of the DDEP are not repeated.
As green bonds begin to take shape, the emphasis on real sector financing, transparency and investor protection may prove decisive in rebuilding trust and unlocking long-term capital.
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