First Cabo Verdean green bond listed on LuxSE

The Luxembourg Stock Exchange and Bolsa de Valores de Cabo Verde, its counterpart in Cabo 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.

Less than two years after initiating their cooperation, the Luxembourg Stock Exchange (LuxSE) and Bolsa de Valores de Cabo Verde (BVC) can celebrate another milestone made possible by their joint efforts to advance sustainable finance developments within and beyond Cabo Verde. After organising educational programmes and technical assistance by LuxSE in Praia, which contributed to the establishment of the Blu-X platform by BVC, the two exchanges are now cooperating to bring sustainable bonds from Cabo Verde to international investors via LuxSE.

The first listing resulting from this new cooperation is a pioneering green bond issued by the International Investment Bank (iib). The proceeds of the bond will help finance sustainable ocean-based projects and provide affordable loans to individuals and small businesses active 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 Cabo Verde, which forms the very basis for sustainable development in the region,” said Julie Becker, CEO of LuxSE.

Supporting the blue economy

Named Marine and Ocean-Based Blue Bond by the issuer, the bond raised the equivalent of EUR 3.2 million. It has a 5-year maturity and offered an interest rate of 4%. The bond was launched as a public offering issued by the iib in Cabo Verde and was listed on BVC in March. It is the result of the cooperation between BVC and iib, a private bank focused on sustainable development in the region, and which has a stated objective of contributing to the internationalisation of Cabo 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 Cabo 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 bond issuance was met with great interest from both individual investors and investment firms, and demand exceeded supply. Around 20% of the investments came from Cabo Verdean emigrants now based in countries such as Portugal, the United States, France and Luxembourg, wishing to contribute to the development of Cabo Verde’s blue economy.

Connecting capital markets

In January 2022, LuxSE and BVC signed a Memorandum of Understanding to facilitate cooperation in capital market activities, with a specific focus on sustainable finance. As home to the world’s leading platform for sustainable securities, the Luxembourg Green Exchange (LGX), LuxSE committed to support the growth of sustainable finance in Cabo Verde through knowledge exchange, capacity building, educational programmes, and the sharing of best practices.

In September 2023, the two institutions established even closer ties when they signed a cooperation agreement aimed at facilitating listing on LuxSE of sustainable debt instruments listed on BVC and displayed on BVC’s Blu-X platform. The green bond issued by iib is the first listing resulting from this cooperation 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 Cabo 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 Cabo Verde to finance the SDGs,” stated Miguel Monteiro, CEO of BVC.

In November 2022, BVC established Blu-X, a regional listing and trading platform for sustainable and inclusive financial instruments which raises financing for sustainable development, with a specific focus on the blue economy. The strategic partnership between BVC and the United Nations Development Programme (UNDP) played an essential role in making the Blu-X platform a reality, and LuxSE contributed to the project through LGX Academy courses and capacity building in Cabo Verde, and by sharing its experience developing LGX since 2016. Today, Blu-X encompasses 6 sustainable bonds totalling EUR 35 million for sustainable development in the island state.

For more information about iib’s bond, visit the security card here.