On Tuesday 14 November 2023, the Luxembourg Stock Exchange (LuxSE) and Bolsa de Valores de Cabo Verde, its counterpart in Cape Verde, celebrated the first listing resulting from their cross-border cooperation, a pioneering green bond focused on the blue economy issued by the International Investment Bank (IIB).
In less than two years since commencing their collaboration, the Luxembourg Stock Exchange (LuxSE) and Bolsa de Valores de Cabo Verde (BVC) are celebrating another achievement arising from their joint endeavours to propel sustainable finance initiatives within and beyond Cabo Verde. According to LuxSe, following the successful implementation of educational programmes and technical assistance by LuxSE in Praia, which played an important role in establishing the Blu-X platform by BVC, the two exchanges are now partnering to present sustainable bonds from Cabo Verde to global investors through LuxSE.
The inaugural listing resulting from this enhanced collaboration features a new green bond issued by the IIB. The proceeds from this bond will support the funding of sustainable ocean-based projects and provide accessible loans to individuals and small businesses engaged in the sustainable maritime and fisheries sectors in the island state.
“We are very pleased to mark the listing on our exchange of IIB’s Marine and Ocean-Based Blue Bond. This is a concrete and meaningful outcome of our cooperation with Bolsa de Valores de Cabo Verde, and we are confident other sustainable bonds will follow. What makes this bond listing from IIB particularly interesting is that it supports the development of the blue economy in Cape Verde, which forms the very basis for sustainable development in the region,” said Julie Becker, CEO of LuxSE.
Designated as the Marine and Ocean-Based Blue Bond by the issuing entity, this bond raised €3.2 million in equivalent value. The bond has a five-year maturity and a 4% interest rate. It was introduced through a public offering by the IIB in Cape Verde and officially listed on BVC in March 2023. This accomplishment is the outcome of the collaborative efforts between BVC and IIB. IIB named as its explicit goal the contribution to the internationalisation of Cape Verde’s capital market.
Francisco Ferreira, CEO of IIB, commented: “In the year 2020, IIB embarked on a transformative journey with the objective of establishing a sustainable operation. The overarching ambition was to position IIB as a benchmark in capturing and originating value from economic and financial flows between Cape Verde and the West African region within the global economy. This commitment is exemplified through various initiatives, including but not limited to our socially indexed deposit, our social bond, and, in collaboration with UNDP and Joint Fund, the pioneering issuance of the IIB Marine and Ocean-based Blue Bond.”
The issuance of the bond garnered interest from both individual investors and investment firms, surpassing the available supply. Approximately 20% of the investments originated from Cape Verdean emigrants currently residing in countries such as Portugal, the United States, France and Luxembourg. These emigrants expressed a desire to contribute to the advancement of Cape Verde’s blue economy.
In January 2022, LuxSE and BVC formalised their collaboration by signing a Memorandum of Understanding (MoU), emphasising cooperation in capital market activities, particularly in the realm of sustainable finance. LuxSE, housing the world's premier platform for sustainable securities, the Luxembourg Green Exchange (LGX), noted it is committed to supporting the expansion of sustainable finance in Cape Verde through knowledge exchange, capacity building, educational programmes and the sharing of best practices.
Further solidifying their partnership in September 2023, the two institutions inked a cooperation agreement aimed at facilitating the listing of sustainable debt instruments from BVC on LuxSE. These instruments are showcased on BVC’s Blu-X platform. The green bond issued by IIB marks the inaugural listing resulting from this cooperative agreement.
“This is a major milestone! The partnership between BVC and LGX, and BVC and IIB allowed us to reach this moment of having a security issued in Cape Verde, to be listed in an international market as important as the Luxembourg Stock Exchange and displayed on LGX. This all started with the strategic partnership established with UNDP, which enabled us to put in place the Blu-X platform. Cabo Verde Stock Exchange is really doing its part in helping Cape Verde to finance the SDGs,” stated Miguel Monteiro, CEO of BVC.
In November 2022, BVC launched Blu-X, a regional platform for listing and trading sustainable and inclusive financial instruments dedicated to raising funds for sustainable development, particularly emphasising the blue economy. The collaborative alliance between BVC and the United Nations Development Programme (UNDP) was instrumental in bringing the Blu-X platform to fruition. LuxSE supported the project by offering LGX Academy courses and facilitating capacity building in Cape Verde, drawing on its experience in developing LGX since 2016. Presently, Blu-X encompasses six sustainable bonds, amounting to a total of €35 million, dedicated to fostering sustainable development in the island state.