Nigeria’s president, Mr. Muhammadu Buhari, has disclosed the country would finally launch its green bond which has being delayed, in December 2017, to enable it fund some projects in green energy.
If that happens as stated by Buhari in his 2018 budget estimates presentation to the country’s legislators in Abuja, Nigeria could be the first emerging market country to launch a green bond, and this could spur other emerging market countries to initiate theirs.
“Distinguished members of the National Assembly, this administration is committed to the development of Green Alternative Energy Sources. To date, we have signed Power Purchase Agreements (PPA) with 14 solar companies.”
“We also approved: The completion of the 10MW wind farm in Katsina State, a project that was abandoned since 2012; and the concession of 6 small hydro-electric power plants with a total capacity of 50MW,” said Buhari.
He further stated: “To enable the successful take-off of these, and future green projects, I am pleased to inform this Distinguished Assembly that the federal government will be launching the first African Sovereign Green Bond in December 2017. The bond will be used to finance renewable energy projects. We are very excited about this development as it will go a long way in solving many of our energy challenges, especially in the hinterland.”
At the moment, the global market for green bonds which took off in 2007 with an issuance of $600 million by the European Investment Bank (EIB), has grown significantly, and reportedly had an annual issuance worth of $80 billion in 2016.
Also, green bonds which are like regular bonds, are however different in application, being that they can only be used to fund projects that have environmental benefits and clearly contribute to reduction of green house gas emissions.
Within Nigeria’s green bond programme, N150 billion is expected to be raised over a timed period, starting with a pilot issue of N12.384 billion.