Listing of N10.7b green bond may woo huge Diaspora funds
Beside the provision of liquidity, the capital operators have projected an attraction for the untapped Diaspora funds that seem to be left out in the nation’s developmental projects, through the listing of N10.69 billion Sovereign Green Bond on the Nigerian Stock Exchange (NSE).
The development, according to the experts, portends a renewed optimism that will help in developing a new market to provide additional funding for green projects in the country.
According to them, any new sovereign instrument issued by the Debt Management Office (DMO) is sure to trigger activities in the other segment of the market, adding that the secondary market segment of the nation’s bourse would witness a rebound as the new instrument offers alternative assets class of investment.
Specifically, the Chief Executive Officer of Capital Assets Limited, Ariyo Olushekun, in an interview with The Guardian, noted that the listing will provide alternative asset classes for discerning investors and opportunity for them to earn returns.
“The listing is an opportunity to develop the market by providing additional funding for green project and increased product. This is yet another product the investors can tap into. It is a way of rewarding those that embark on green projects. “Companies and corporates are encouraged to do whatever they want to do in a green way. If you are able to come up with such projects, this kind of funding is available for you. It is a very huge market and billions of dollars are available for the project. It will put us in a very good pedestal,” he said. The Managing Director of Dependable Securities Limited, Chinenyem Anyanwu, explained that the listing of the bond, which is a debt instrument, would encourage more investment from corporates and companies and enable Nigerian residents abroad to take part in the nations’ developmental projects. According to him, capital markets have a key role to play in mobilising finance to support the Paris Climate commitments and green bonds are among the financing options available to private firms and public entities keen on backing climate and environmental investments. He, however, urged government to make available an exit option for investors, who would not want to wait until maturity in its guidelines and operational procedures. “Government must provide exit options for investors to boost patronage of the product. This is what is lacking in other FGN bond. As the product is being traded, it would increase liquidity for the market and the product. In fact, it would open new base for investors,” he said.
Meanwhile, the DMO has stressed the need for more investors’ education and stakeholders’ enlightenment on the bond, to ensure that investors at all levels, both retail, institutional and foreign, participate. The Director-General of the DMO, Patience Oniha, while addressing stockbrokers during the official listing of 13.48 per cent five-year N10.69 billion FGN Green bond on the floor of the NSE, in Lagos, at the weekend, restated government’s commitment to reduce carbon emissions by 20 per cent unconditionally and 45 per cent with international support by the year 2030.
According to her, trading on the instrument is expected to boost climate change awareness, attract more investors and provide diversification options for investors. She noted that the issuance of the bond would encourage other categories of issuers including sub-nationals government and corporates, assuring that the issuer would adhere to the high standard in order to facilitate development of a robust and vibrant green market. The Chief Executive Officer of the NSE, Oscar Onyema, said the NSE recognises the importance of a well-developed capital market in supporting the capital expenditure programmes of public and private sector entities. According to him, this informed the Exchange’s efforts at conceptualising and developing the Green Bond Product Paper, which was embraced and championed by the former Minister for Environment, Ms. Amina Mohammed. The NSE boss said with the launch of the green bond, government has been able to raise funds for the financing of key capital projects, while also creating a benchmark for the efficient pricing of future issuances from the corporate sector.
“We are indeed elated to see the materialisation of Green Bonds in our market, and to observe its adoption by other actors towards the development of the sustainable finance sector in Nigeria.
“The NSE will continue to provide an efficient and liquid market for investors and businesses in Africa, to save and access capital and promises to continue its collaboration with the various levels of Government and all market stakeholders, to collectively contribute to the economic growth and development of Nigeria and Africa at large.”