The Debt Management Office (DMO) has listed the first African sovereign Green Bond on the Nigerian Stock Exchange (NSE), as well as on the said on the FMDQ OTC Securities Exchange.
Taking a cue from other countries, the Federal Government of Nigeria (FGN), through the Ministry of Finance (MoF), Ministry of Environment (MoE) and the Debt Management Office (DMO) listed a N10.69 billion Series 1, 5-Year 13.48 per cent Fixed Rate Bonds due 2022 on FMDQ and NSE.
Speaking at the pre-listing conference at the NSE, the President, Oscar Onyema noted that the three trillion dollars required to provide infrastructure for the next 25 years could be addressed with Green Bond issuance.
Onyema said the nation’s Green Bond was the first to be issued by an African country, noting that Nigeria was the fourth nation in the world to issue Green bonds after Poland, France, and Fiji, while adding that the growth of the global Green Bonds industry in the past 10 years, had been unprecedented commencing with the 800 million dollars with pioneer issuance by the European Investment Bank in 2007.
Onyema added that the annual issuance of Green Bonds grew by almost 200 times to 160 billion dollars in 2017, with issuance for 2018 currently projected to grow to 250 billion dollars. According to him, issuers of green bonds cut across the public and private sectors, and include National Governments such as Poland, France, Fiji, and Nigeria. He said corporate issuers could also be found across various industries from healthcare and energy, to transportation and banking.
Onyema said Green Bonds present a unique opportunity for financing the country’s climate change objectives, delivering on critical infrastructure gaps to unlock economic growth potential.
He described green bonds as a turning point and a new paradigm for Nigeria and urged listed companies and other corporate organisations in Nigeria to use globally recognised platforms at the NSE to raise green capital.
“Green bonds also provide a way for issuers to diversify their capital structures and attract a wider base of investors from both domestic and international markets.
He commended the Debt Management Office, the Ministry of Environment, the Securities and Exchange Commission and all the members of the Green Bond Advisory Working Group for the actualisation of the initiative.
Mr Samuel Agbevem, Partner and West Africa Sector Leader for Climate and Sustainability Services, Ernest and Young, said climate change had become a reality in Nigeria and needed to be tackled.
Agbevem said issuance of Green bond would provide a responsible finance opportunity at reduced cost to tackle climate change and environmental issues.
Agbevem, however, stressed the need for an establishment of green bond framework that would attract the private sector. He said the framework must align with global principles and best practices, and that integrity and transparency must be inherent in the private sector framework.
Ms Patience Oniha, Director-General of the DMO, during the issuer’s special address at the FMDQ, stated that the issuance of the nation’s first sovereign green bond further demonstrates Nigeria’s commitment to the protection of the environment. Nigeria endorsed the Paris Agreement on Climate Change on September 21, 2016 and undertook to achieving the Nationally Determined Contributions (NDCs), aimed at reducing carbon emissions by 20 per cent unconditionally and 45 per cent, with international support, by 2030.
“These projects require funding and the issuance of the green bond, the proceeds from which are dedicated to financing environmental projects, signals the government’s commitment to funding the NDCs.”
She explained that DMO worked with the Federal Ministry of Environment and other stakeholders to develop guidelines and operational procedures for the green bond and the issuance of the debut green bond. “The FGN has led this issuance, adhering to globally accepted standards and requirements, setting a precedence for other categories of issuers such as sub-national governments and corporate to issue green bonds. Further to the listing of this instrument, the DMO expects that trading will not only bring about climate change awareness but will also diversify the Nigerian capital markets and attract more investors” she said.
In his Special Address, the Minister of State for Environment, Mallam Ibrahim Usman Jibril, commented, “the listing of the FGN green bond enables the Federal Government deliver on program 47 of its economic recovery and growth plan.
Mr Bola Onadele, Managing Director/CEO of FMDQ, in his closing remarks, applauded the Federal Government of Nigeria, through the Ministry of Finance, Ministry of Environment and Debt Management Office, for achieving this landmark, stating that this was yet another highly exemplary and indeed, positive step towards addressing some of the infrastructure and environmental challenges in the nation. He also commended the sponsor to the issue and Registration Member (Listings) of FMDQ for their concerted efforts towards ensuring the success of the issuance. He further reiterated that through consistent collaboration with its stakeholders, FMDQ shall continue to further deepen and effectively position the Nigerian DCM for growth, in support of the realisation of a globally competitive and vibrant economy.
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