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Brief on Green Bonds

gbNigeria embraced the issuance of green bonds as an innovative and alternate way of raising finance both locally and internationally. It is being domesticated to suit the Nigerian market and considering a number of themes to be funded by the green bond have overlaps with the Economic Recovery and Growth Plan (ERGP) of the FG. It therefore presents an opportunity to deliver on the Nigeria’s National Determined Contribution providing a fundamental reorientation of financial flows within the economy.

The issuance of the green bond has begun the process of greening the federal budget and capital market. There is flow toward low-carbon, climate resilient opportunities and away from carbon intensive opportunities and away from carbon intensive, polluting activities or those that exacerbate climate vulnerability leading to poverty, insecurity and reduced health quality. It also demonstrates to the global community Nigeria’s commitment to achieving its targets in the NDCs.

A synergy between Federal Ministry of Environment and the Debt Management Office (DMO) which has been mandated by the Minister of Finance to drive the process was developed to explore and channel resources into viable green projects. The Green Bonds (GB) market creates an opportunity to increase the profile of Green projects in Nigeria and provide a platform for the Government to pull local and international funds.

The Department of Climate Change in collaboration with its line MDAs identified and developed viable green projects using their submissions for the 2017 Budget proposals and MTSS under the platform of the Inter-ministerial Committee on Climate Change

  • Federal Ministry of Agriculture
  • Federal Ministry of Water Resources
  • Federal Ministry of Petroleum
  • Federal Ministry of Power, Works and Housing
  • Federal Ministry of Industry
  • Federal Ministry of Transport

Green Bond Advisory Group

To enable the Federal government draw on a wide arrange of expertise in progressing and developing the issuance of the green bond, the Ministry of Environment and Finance established a Green Bond Advisory Group (GBAG). The GBAG is made up of development partners (World Bank, DfID, AfDB and IFC), Capital Market Operators (Nigeria Stock Exchange, Capital Assets, Chapel Hill Denham and Stanbic IBTC) and Climate Bonds Initiative, London. The GBAG meets frequently with its first meeting in January of 2017 leading to a conference on green bonds in Lagos in February of 2017 at which the Acting President was a key note. The GBAG remains the interface between the development partners and the capital market in oversight functions.

The first issuance to the tune of 10.69bn took place in December 2017and was fully subscribed.  Three Projects has having met the requirements for the first phase are currently being funded. These projects were subjected to the provisions in the guidelines and a team of consultants has spent considerable time reviewing the project details. The team has also been able to identify the emissions reduction contribution of the projects.

  • Renewable Energy Mini Utilities (REMU)
  • Energising Education Program (EEP)
  • Afforestation Program

There are plans underway for the second issuance which proposes to be bigger.

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