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Updated: FG set to issue debut N10.69 bn Green Bond in domestic market

by HOPE MOSES-ASHIKE

December 14, 2017 | 1:00 am
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The Debt Management Office (DMO) on Wednesday said as part of the preparations towards the Issuance of the first Sovereign Green Bond, it would sensitise prospective investors in the Bond through a Road show in Abuja and Lagos in December 14 and 15.

The size of the bond is expected to be N10.69 bn according to the DMO.

A statement from the office of the DMO explained that the Green Bond is being issued following Nigeria’s endorsement of the Paris Agreement on Climate Change on September 21, 2016. The Paris Agreement aims to strengthen the global response to the threat of Climate Change, since the signing of the Agreement, various countries who are parties to the Agreement have initiated several steps aimed at making the environment better.
Ayodeji Ebo, managing director, Afrinvest Securities limited explained that the green bond is meant for projects that will reduce emission.
He told BusinessDay by phone that companies that are into such projects like solar among others would get support through the bond issuance.
The Green Bond proceeds will be used to finance projects in the 2017 Appropriation Act that have been certified as Green because of their positive effects on the environment. Amongst the projects to be financed with the proceeds of the Green Bond Issuance are the Renewable Energy Micro Utilities and Afforestation Programmes.
With the Green Bond Issuance, Nigeria will become one of the few countries in the world and indeed the first African country to issue a Green Bond. Moody’s Investors Service has assigned a GB1 (Excellent) Green Bond Assessment to the Issuance.
The DMO is working with the Federal Ministry of Environment towards the Issuance while Chapel Hill Denham is the Financial Advisers to the Transaction.
The Offer will be advertised in various media including newspapers and the DMO’s website to enable the public subscribe for the Bonds.
The global market for green bonds took off in 2005 with an issuance by the European Investment Bank (EIB), since then the market has grown significantly to an annual issuance market last year of $80 billion. By year-end 2017, the market is expected to exceed last year’s amount with China remaining the dominant participant.
Commitments by signatory nations in the Paris Agreement are expected to boost this market, as resources are redirected toward development objectives that are sustainable from a climate perspective and contribute to global reduction in emissions.
President Muhammadu Buhari signed and ratified the Paris Agreement in March of 2017. Article 2 of the agreement outlines one of its aims, which is “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.”

 

HOPE MOSES-ASHIKE

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by HOPE MOSES-ASHIKE

December 14, 2017 | 1:00 am
  |     |     |   Start Conversation

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