On Wednesday 14 September 2022, during an official visit to Luxembourg by representatives from BRVM (Bourse Régionale des Valeurs Mobilières), the Luxembourg Stock Exchange (LuxSE) and the West-African regional exchange signed a Memorandum of Understanding (MoU).
The MoU, which places a heavy emphasis on sustainable finance, marks the first official step in what is hoped to be a journey of cooperation to strengthen sustainable finance in the markets covered under BRVM’s remit.
“Sustainable finance represents a financing opportunity for emerging countries because they have the possibility of attracting a new type of investors, who otherwise would not have been interested in their bond issues. That is why, I am delighted with the signing of this MoU with the Luxembourg Stock Exchange for the development of sustainable finance within the West African Economic and Monetary Union,” said Edoh Kossi Amenounve, CEO of BRVM.
Cooperation across continents
BRVM is one of the cornerstones of the West African Economic and Monetary Union, which works towards greater integration between Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo. The exchange is shared by the eight countries. LuxSE is the leading listing venue for international debt securities and a pioneer in sustainable finance. It established the Luxembourg Green Exchange (LGX) in 2016, the world’s leading platform for sustainable finance, currently encompassing more than 1,400 sustainable debt securities.
Through the MoU, the two exchanges commit to explore the creation of a bond market dedicated to green, social, sustainability and sustainability-linked bonds at BRVM, and analyse opportunities for dual-listing of sustainable securities. In addition, the two institutions commit to collaborate on sustainable finance training programmes as part of the BRVM Academy.
“Strengthening cooperation with our counterparts in Africa is a key priority for our exchange this year. We are pleased to join forces with BRVM and work together to help BRVM establish a market for sustainable bonds and furthermore make it easier for international investors to identify investment opportunities that finance sustainable development in Western Africa. While Europe is in the driving seat of sustainable finance, Africa represents only a fraction of global green bond issuance. This needs to change as sustainable capital is needed to finance sustainable development in the region,” commented Julie Becker, CEO of LuxSE.
Progress through financial literacy
In 2019, BRVM announced the launch of the BRVM Academy to educate financial professionals and the general public from the Western African Economic and Monetary Union in key theories behind capital markets and stock exchanges. Similarly, in May 2020, LuxSE launched the LGX Academy, which allows course participants to gain a deeper understanding of the fundamentals of sustainable finance and the regulations and key players which shape the industry. Reflecting their strong focus on addressing the knowledge gap that hinders the acceleration of sustainable finance, the two institutions will now team up to develop sustainable finance courses as part of the BRVM Academy.