‘Nigeria’s green bond market exceeds N55b as NGX targets more issuances’

Nigerian Exchange Limited (NGX) has disclosed that the value of Nigeria’s green bonds market has increased to N55.52 billion within the last four years.

Chief Executive Officer of the Nigerian Exchange Limited (NGX), Temi Popoola made the disclosure at a Sustainable Finance Training 2021 hosted by the exchange, in collaboration with the International Finance Corporation (IFC).

According to him, the exchange is committed to fostering the growth of sustainable financial products, which integrate the financial risks and opportunities associated with climate change and other environmental challenges.

Popoola in his opening remarks, said sub-Saharan Africa is the least responsible for global climate change but remains one of the most vulnerable to the risk posed by the change.

Citing the World Meteorological Organisation State of the Climate in Africa Report 2020, he stated that the investment in climate adaptation for sub-Saharan Africa would cost about $30 to $50 billion yearly over the next decade.

He revealed that the limited flow of climate finance remains a major issue for the implementation of mitigation and adaptation actions in Africa particularly Nigeria.

He said the NGX in 2016, conceptualised and developed the green bond product paper, which was embraced and championed by the Debt Management Office (DMO) and the Federal Ministry of Environment.

Popoola stated that this is in recognition of the climate finance need particularly in Nigeria and the urgent action required to combat climate change as well as its impact as enshrined in the Paris Agreement on Climate Change.

“This effort led to the issuance of the maiden N10.69 billion, 13.48 per cent five-year green bond in 2017 to fund projects and develop renewable energy.

“This was sequel to the ratification of the Paris Climate Agreement by the Federal Government of Nigeria which necessitated the need for long term capital to fulfill Nigeria’s Nationally Determined Contributions (NDCs) in reducing greenhouse gas emissions and ending gas flaring by 2030.”

In addition, Popoola said the sovereign issuance paved way for the emergence of corporate green bond market with N15 billion, 15.5 per cent five-year fixed rate senior unsecured green bond by Access Bank and N8.5 billion, 15.6 per cent 15-year guaranteed fixed rate senior green infrastructure bond by North South Power Company.

He stated that the follow-on issuances have further increased investible instruments and deepened the Nigerian green bond market, even as all the corporate and sovereign green bonds are listed on NGX presently.