The value of Nigeria’s green bonds market hit N55.52 billion with four issuances recorded since the debut issuance by the federal government in December 2017.
In 2017, the Nigerian Exchnage (NGX) Limited collaborated with the Ministry of Finance and other stakeholders to launch the first Climate Bond Initiative certified sovereign bond valued at N10.69 billion.
According to NGX, the issuances and listings include the N10.69 billion, 13.48 per cent five-year sovereign green bond issued in 2017 by the Federal Government of Nigeria (FGN); the N15 billon 15.5 per cent 5-year fixed rate senior unsecured green bond issued by Access Bank of Nigeria Plc.
“Others are N14.82 billion first and second fixed rate senior green infrastructure bond by North South Power Company (NSP) and the series II N15 billion 14.5 per cent FGN seven-year sovereign green bond in 2019 which recorded a 220 per cent subscription rate.”
Meanwhile, stakeholders called on the use of green bond through the capital market in financing green economy to mitigate the increasing dangers of unbridled exploitation of the environment.
Green bonds can be defined as debt securities issued by financial, non-financial or public entities to finance 100 per cent green projects and assets. Green bonds generate financing for projects in different sectors like renewable energy, energy efficiency, green housing, and other eco-friendly projects while tapping into the vast pools of financing held by institutional and other investors such as pension funds, insurance companies and sovereign wealth funds available in global capital markets.
Globally, stakeholders are waking up to the irreversible damage caused to the ecosystem through human actions that have resulted in global warming. The increasing occurrence of natural disasters, declining natural resources and climate change have become some of the greatest challenges and combating these issues requires more financing than governments alone can provide and this is where Green Bonds come in.
The director-general of the Securities and Exchange Commission (SEC), Mr. Lamido Yuguda, at the official launching ceremony of the FMDQ Green Exchange, said the Commission remains a strong advocate for the promotion of infrastructural development through sustainable financing as it believes that the huge budget deficit and infrastructural gap in the country can be financed by harnessing resources available from sustainable finance investors and interest groups around the world.
“Without doubt, there are tremendous opportunities in the areas of power generation and transmission, rail transportation, housing, agriculture and water among others, where sustainable financing can be an avenue for the private sector to partner with government in the overall drive for prosperity and economic development,” he said.
At a retail investors’ webinar with the theme: ‘Sukuk and Green Bonds: More than just Investing’, the CEO of the Nigerian Exchange Limited, Temi Popoola said the potential for sukuk and green bonds remains immense and is likely to expand over the years underpinned by new markets, products, issuers and healthy investor investors’ appetite.
He assured stakeholders that the exchange would continue to provide an efficient and liquid market for investors and businesses in Africa to access capital, saying “We promise to continue our collaboration with all market stakeholders, to collectively contribute towards the enhancement of this exciting asset class, and ultimately towards the growth of green and sukuk bonds in Nigeria and Africa at large.”
The managing director/ CEO of FMDQ Group, Bola Koko said, there is no gainsaying that sustainable finance is a critical pillar to challenging the acute threats of climate change on the global economy.
He noted that the continuous rise in sea level, water pollution, air pollution, desertification, oil spills, deforestation, industrial & solid waste, flooding, erosion and extreme adverse weather conditions, consequently resulting in damage of properties, infrastructure dilapidation, internal migration, poor health and negative impact on various sectors of the economy, are key indications of the need to mobilise long-term funding for capital formation through the Nigerian debt capital markets to address these challenges.
Koko said: “our quest to develop the Nigerian green bond market through the Programme is a continuous journey of sensitisation, advocacy, engagement and collaboration with various capital market stakeholders to entrench the principles of sustainability for revolutionising the Nigerian debt capital markets. We will continue to champion innovative initiatives geared towards positioning the Nigerian green bond market as a catalyst for resolving the Nigeria’s environmental challenges.”
Moreover, the managing director/CEO of APT Securities and Funds Limited, Kasimu Garba Kurfi urged investors, especially those in the retail sector, to leverage opportunities in green bonds to diversify their portfolio.