Nigeria paves way for Green Bond

Nigeria paves way for Green Bond

- Nigeria Government has held a Stakeholders’ consultation on pilot issuance of Green Bond

-  The  forum is part of a continuing collaboration between the Ministry of Environment and the Ministry of Finance to explore and develop a product that can leverage and channel resources towards viable Green projects

- A sensitization workshop is also to be held in Lagos for Capital Market Operators in Nigeria

The Federal Ministry of Environment has held a Stakeholders’ Consultation on the pilot issuance of Green bonds in Nigeria as part of moves to explore innovative sources of funding for its climate action plans towards sustainable development.

Minister of Environment Amina Mohammed revealed in a statement made available to, that Nigeria, like most countries around the world faces vast investment needs for the transition to a sustainable, low-carbon and climate resilient economy and the government has made it clear that private sources of finance are needed for tapping into the international capital markets, as well as domestic capital is crucial.

Nigeria paves way for Green Bond

Nigeria's minister for Environment Amina J Mohammed.

According to UNEP, Green bonds have the potential to deliver the low carbon, climate resilient infrastructure needed in Nigeria (e.g. renewable energy, low-carbon transport, water infrastructure, sustainable agriculture and more) with access to private capital at scale through the international (and domestic) bond markets.

Access to private capital is essential to substantially lower the cost of capital for green projects, and enable Nigeria to move to a less emissions intensive growth path.

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Nigeria’s Intended Nationally Determined Contribution’s (INDC) document puts forth the stated targets for Nigeria’s contribution towards climate improvement and following a low carbon path to progress.

The resource needed to finance the NDCs is put at USD142 between now and 2030. Creative channels for mobilizing resources locally and externally are needed. The issuance of Green Bonds, which have grown from USD3b per annum since 2012 to an estimated USD100 b for 2016 present a viable option.

The stakeholders Consultation was held at Transport Hilton Hotel, Abuja with participants drawn from Federal Ministry of Finance, Federal Ministry of Budget and National Planning, Ministry of Trade and Investment, Nigerian Stock Exchange (NSE), Debt Management Office (DMO), Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), National Assembly, Africa Finance Corporation, World Bank, UNEP, UNDP, McKingsey & Company, Chapel Hill Denham, Stanbic IBTC, DFID/NIAF and other private sector representatives.

Speaking at the event, Mr. Oscar Onyema, CEO of the Nigerian Stock Exchange said that there is significant market potential for Green Bonds in Nigeria as a developing market with a population in excess of 180 Million people, with projected annual emissions of 900m tonnes requires significant capital to develop mitigation and adaptation interventions that will reduce it.

He further stated that green bonds could mobilize funds from investors who have strong environmental focus, require transparency and have lower risk appetite.

It should be recalled that on Tuesday 17 May 2016, the Honorable Minister of Environment, Amina Mohammed was presented with a Proposal by the Nigerian Stock Exchange (NSE) in Lagos on the issuance of green bonds in Nigeria, after which several consultations with Federal Government entities, NSE, SEC and UNEP were held to critically look into the potential of financing Nigeria’s INDC implementation through Green Bonds and other muti-laterals funding mechanisms

Green bonds have been the subject of increasing government, investor and media interest and expectations, driven by the prospect of matching large low‑carbon investment requirements with the trillions of dollars in global bond markets held by institutional investors.


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