Tony Blair Institute for Global Change

November 14, 2024

Recently, the government of Ghana launched a qualitative green-finance taxonomy that serves as a crucial tool for promoting environmental sustainability within the country.

This framework sets out clear environmental guidelines to define “green” in the Ghanaian context and – because it aligns with the taxonomies of South Africa and Rwanda – provides some level of uniformity across the continent. By establishing standards, Ghana enhances its own sustainability efforts while also contributing to a broader regional framework, which encourages responsible investments and environmental stewardship throughout the continent.

These standards will strengthen the Ministry of Finance’s long-term ability to access a discount – known as a greenium – available to green-bond issuers. They will also allow Ghana to more readily take advantage of climate-debt swaps, helping the country manage its debt more effectively and ensuring that spending is being used to create a more sustainable future. In addition, these new standards will prevent private-sector greenwashing, thereby giving investors confidence in green bonds, lowering capital costs and encouraging corporations to pursue green investments.

TBI was pleased to contribute to the advisory process that harmonised Ghana’s taxonomy with green guidance from other parts of Africa. This uniformity simplifies decision-making by, for example, helping interested investors to easily understand the assets that underlie future Ghanaian green-bond issuances.

We also played a role in identifying investment opportunities for a “transitional taxonomy” that could be used to define future energy-transition partnership agreements. These included investment in gas to fortify Ghana’s electricity grid; with global warming increasing the frequency and intensity of droughts, the country’s hydropower assets are becoming less dependable. Other opportunities that were identified were the promotion of improved cookstoves to reduce forest degradation, and investments in sustainable mining and mineral processing that will enable global decarbonisation efforts.

This advisory work evolved out of TBI assistance for the Ministry of Finance as it updated its Guidelines for the Preparation and Appraisal of Projects in order to mainstream climate considerations across government initiatives. All government authorities sponsoring projects must discuss how resilient their plans are to climate change, as well as citing any benefits in terms of reducing or removing emissions, and contributing to Ghana’s systemic climate resilience.

Imad Ahmed, Climate Advisor