DMO to list N10.7b maiden Green Bond on NSE in January 2018

Seeks Participation Of Retail, Institutional Investors
The Debt Management Office (DMO) has announced plans to list the N10.7 billion series 1 unsecured bond under the N150 billion maiden green bond programme on the Nigerian Stock Exchange (NSE) by January 2018.

The Ministry of Environment in collaboration with the Ministry of Finance initiated the move towards the issuance of Nigeria’s maiden sovereign green bond Green Bonds are debt instruments issued to raise capital for the funding of specific clean power projects aimed at reducing climate change risks. The bond issuance was introduced out of investors’ need to invest in high-growth, clean energy sector projects other than through equities and funds.

It would also enable the country to tap into the growing global market for green bonds, which is estimated to reach $150bn by the end of 2017.Director General of DMO, Patience Oniha while addressing market participants in Lagos yesterday, said the green bond would rank at par with other Federal Government bonds on the NSE.

Already, guidelines have been issued by the Ministry of Environment to direct the process for the issuance of the green bonds targeted specifically at the Nigerian market.

Oniha said qualifying project areas have been identified while an Inter-Ministerial Committee on Climate Change comprising key applicable ministries, departments and agencies (MDAs) have been established for the project.

“The green bond principles is made up of four key components, which includes the use of proceeds, project eligibility, management of proceeds and reporting of overall processes,” she stated.

She added that all designated projects within the bond offering would provide clear environmental benefits quantifiable by the issuer.“The Green Bond Guidelines have been used as a guiding reference for the selection process, as well as the target in the NDCs. Each ministry has been responsible for identifying eligible green expenditure within its programmes.

“The Inter-ministerial Committee on Climate Change has already excluded activities that do not comply with CBI certification standards.It has undertaken the selection of Eligible Green Expenditures (EGE).”

On the benefits of the green bond to institutional investors, Oniha said: “The bond will enhance the reputation of institutions that offer green bonds while promoting interests in sustainable and socially responsible investments. The issuance would also attract investors outside local or traditional markets,” she said.

Deputy Director, Department of Climate Change, Halima Bawa Bwari said the projects would require linkages with key targets in the Nationally Determined Contributions (NDC), which reflect Nigeria’s commitment to the conference of parties of the United Nations Framework Convention on Climate Change.She explained that while all or a proportion of the proceeds would be used for refinancing, issuers were expected to provide an estimate of the share of financing for the project.