Nigeria mulls issuing N10.6 billion Green Bond to finance renewable energy projects in the country Patience Oniha, the Director-General, Debt Management Office, DMO, has said.
The move, says Oniha, is aimed at protecting the environment.Green Bonds are debt instruments tied to environmental projects to address climate change.
The issuance of the Green Bond is the result of the endorsement of the Paris Agreement on Climate Change on Sept. 21, 2016, by the Nigerian government.
The proceeds of the bond will be used to finance projects in this year’s budget that had been certified as green because of their positive effects on the environment.
“Three renewable energy projects are in consideration which include: Renewable Energy Micro-Utilities Programme, Re-energising Education Programme and Afforestation Programme,” she says.
Nigeria opted for a Green Bond as alternative source of funding because of the huge capital outlay required to finance renewable energy projects.
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The government has assured liquidity to investors staking their funds in the Green Bond as the Debt Management Office said the bond would be listed on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange.
The bonds will be launched in Dec 18th, 2017, said Lanre Buluro, director of sales at Chapel Hill Denham, the financial adviser for the issuance.
The Green Bond, the first in Nigeria and West Africa, second in emerging markets and fourth globally was a five-year tenored instrument being issued to raise funds for specific green projects across the country.
The Nigerian government is offering units of sale of 1,000.00 NGN, which are subject to a minimum subscription of 1,000,000.00 NGN.
According to Bloomberg New Energy Finance (BNEF), as of September 2017, over US$96 billion of green bonds had been issued globally this year, and another US$39 billion of green bonds were expected by end-2017, for a total of US$134.9 billion for the whole year.
The expected US$135 billion annual global issues of green bonds would be 36 percent higher than in 2016, and compares to just US$500 million in green bonds issued globally in 2008.