By Chinelo Chikelu
The federal government remains optimistic that it will launch its Green Bond climate financing initiative this August, despite the many procedural processes necessary to the establishment of the bonds.
This was disclosed by the Federal Ministry of Environment, through the Director, Department of Climate Change (DCC), Dr. Peter Tarfa, who revealed that the routine administrative issues associated with the collaboration of the various regulatory organisations involved in the establishment of the green bonds are gradually being eliminated, and the ministry is quite optimistic of an August launch.
Green bond is a part of the Nigerian government’s initiative to domestically raise finances for climate projects, in order to meet up with Nigeria’s Nationally Determined Conditions (NDCs), in particular her unconditional target to reduce carbon emissions by 20 per cent by the year 2030.
“The Green Bond is an innovative initiative meant to generate resources for green projects,” Tarfa said. Initially reflected in the nation’s budget, are the sovereign green bonds, only open to government entities. This will be followed later by the launch of offshore green bonds not necessarily tied to the federal budget, which private sector can purchase.
“There is have an advisory group on the green bonds. When it identifies a project, green bonds will be issued, entities will buy the bonds, and through the guarantee of the budgetary allocation, the stock exchange, the Debt Management Office and the Bureau for Public Procurement will all apply the necessary regulations to ensure losses are not suffered, and that all green projects generate required revenue to pay back the investors.”
Projects to be tackled via the green bonds are tailored towards the five priority areas of the federal government, and major emitters of greenhouse gases (GHG), these include agriculture, oil & gas, transport, industrial and the power sectors.
Government has developed sectoral plans, actions to be initiated across these sectors to reduce carbon emissions. The plans are soon to be validated and then forwarded to the Federal Executive Council (FEC) for approval. Once approved, each of these sectors are obligated to note climate change in their budgetary allocations to kickstart implementation of the plans,” averred the director.
In a rather indirect means of ascertaining government’s expenditures on climate adaptive and mitigation projects, the DCC is determined to track resources channeled towards climate resilient projects in the past and how these sources were deployed via its 2017 Appropriation allocation.
He said, “So many activities are taking place that help in adapting to the impact of climate change, listing the Great Green Wall initiative of the FME, smart agriculture projects, forestry ministries tree planting activities across several states in the country, and the FCT transport sector, indirect reduction of GHG emissions via the introduction of BRT buses in the city.
He averred that by calculating the cost of the BRT buses, the vehicular emissions reduced by its presence, and a cleaner, if not a 100 per cent carbon free railway system in the FCT, the DCC can determine government’s expenditures on climate mitigation programmes and the impact of such on the NDCs.
Increased attention to domestic climate financing rose following the US exit from the COP 21, Paris Agreement. Although, developed nations like Germany, France, Canada, Britain, and developing countries like Brazil, India, reiterated intentions to adhere to the agreement, developing countries in Africa, dependent on financial aid from the developed nations, see the wisdom of initiating local financing in order to meet their climate agreements by the year 2030.