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FMDQ Admits Pioneer FGN Green Bond To Its Platform

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Globally, countries are resorting to mobilising funds from the debt capital markets (DCM) to finance environmentally friendly projects to support development for the good of their citizenry.

The federal government of Nigeria (FGN), through the Ministry of Finance (MoF), Ministry of Environment (MoE) and the Debt Management Office (DMO), has taken a cue from other countries, by listing the first green bond in the Nigerian DCM – the Federal Government of Nigeria ₦10.69 billion Series 1 5-Year 13.48per cent Fixed Rate Bonds due 2022 – on FMDQ OTC Securities Exchange (FMDQ or the OTC Exchange).

The proceeds from the issuance would be used to provide access to electricity for 45 communities across the country, develop off-grid Independent Power Plants (IPP) for universities and create afforestation programs that aim to increase forest coverage through the plantation of seedlings to cover 131,000 hectares of land. “This is yet another commendable feat for the FGN, with the MoF, MoE and DMO, in their respective roles, addressing environmental challenges as well as championing development in the Nigerian DCM,” FMDQ OTC Securities Exchange said in a statement yesterday.

Speaking at an event organised to commemorate the success of the issuance, director-general of the DMO, Ms. Patience Oniha , said 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 achieve the Nationally Determined Contributions (NDCs), aimed at reducing carbon emissions by 20 per cent unconditionally and 45 per cent, with international support, by 2030.

She noted that the projects require funding and the issuance of the green bond, the proceeds from which are dedicated to financing environmental projects.

The debt office 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.

Oniha said the federal government adhered to globally- accepted standards and requirements, setting a precedence for other categories of issuers such as sub-national governments and corporations 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 address, the minister of State for Environment, Mallam Ibrahim Usman Jibril, said  “the listing of the FGN green bond enables the federal government deliver on program forty-seven (47) of its economic recovery and growth plan.



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