The Nigerian Stock Exchange (NSE) on Thursday said there were possibilities that Nigeria’s first sovereign green bond would be oversubscribed when it is finally issued within Q1 of 2017.
It said at the green bond capital market and investors conference in Lagos, that if Nigeria’s capital spending on infrastructure and real estate grew to $1.5 trillion within 2030, the country would need sources of funding which the planned green bond issuance offered.
NSE’s Executive Director, Capital Markets, Haruna Jalo-Waziri, said this in the presentation he made at the conference which had Vice President, Yemi Osibanjo, environment minister, Amina Mohammed, and power minister, Babatunde Fashola, amongst others in attendance.
The summit offered the government an opportunity to speak with investors about Nigeria’s and Africa’s first sovereign green bond offering, from which about N20 billion would be raised for climate-friendly infrastructure development in the country.
Jalo-Waziri said: “oversubscription is commonplace,” adding that benefits for investors in the green bond include balance risk-adjusted financial returns with environmental benefits, satisfying environmental social governance (ESG) requirements and green investment mandates, as well as improving risk assessment in an otherwise opaque fixed income market through use of proceeds reporting.
He noted that the NSE was committed to facilitating access to a deep pool of green capital by the government, and that listing and trading of products that fosters innovation and sustainable investing would be supported by it.
Similarly, Mohammed said at the seminar that the bond issuance was part of the ministry’s contributions to the government’s efforts to diversify Nigeria’s economy, create jobs, improve security, provide a framework for sustainable development and deliver on the country’s commitment to the Paris Agreement.
“The Paris Agreement which was signed by Mr. President enabled us to develop our Nationally Determined Contribution (NDC) and constitute the inter-ministerial committee on climate change charged with the responsibility for cross sectoral integration of climate change issues into main stream planning and also to identify a pipeline of projects which the green bonds will fund,” said Mohammed.
She further stated: “The delivery of Nigeria’s NDC will require a fundamental re-orientation of financial flows within the economy. Capital will need to flow toward low-carbon, climate resilient opportunities and away from carbon intensive, polluting activities or those that exacerbate climate vulnerability leading to poverty, insecurity, and reduced health quality.
“Green bonds present an opportunity for us to begin to achieve this. The process which will see Nigeria launch the first sovereign green bonds in an emerging market began as a seed which was sown by the private sector – the Nigerian Stock Exchange – so you can say we have achieved half the circle and will come full circle when we finally issue the bonds this quarter.”