Nigeria’s green bond market exceeds N55bn mark in 4 yrs

The Nigerian Exchange (NGX) says the value of the country’s green bonds market has grown to N55.52 billion in four years, from 2017 to 2021.

The Chief Executive Officer, NGX, Mr Temi Popoola, said this during the Sustainable Finance Training 2021 hosted by the NGX in collaboration with the International Finance Corporation (IFC) on Monday in Lagos.

Popoola said it was noteworthy that the size of the green bond market currently stood at N55.52 billion (133.8 million dollars).

Popoola added that the NGX was committed to fostering the growth of sustainable financial products which integrated the financial risks and opportunities associated with climate change and other environmental challenges.

He explained that “the Sub-Saharan Africa is the least responsible for global climate change but remains one of the most vulnerable to the risk posed by climate change”.

He said that the World Meteorological Organisation State of the Climate in Africa Report 2020, showed that the investment in climate adaptation for Sub-Saharan Africa, would cost between 30 to 50 billion dollars each year over the next decade.

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

“NGX in 2016 conceptualised and developed the Green Bond Product Paper which was embraced and championed by the Debt Management Office and the Federal Ministry of Environment.”

“This effort led to the issuance of the maiden N10.69 billion (25.8 million dollars) 13.48 per cent five-year green bond in 2017 to fund projects to 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 in reducing greenhouse gas emissions and ending gas flaring by 2030,” he said.

Popoola also said that the second tranche, N15 billion (36.1 million dollars) 14.5 per cent seven-year green bond was issued in June 2019 and was over-subscribed.

“The sovereign issuance paved way for corporate green bond market to emerge with N15 billion (36.1 million dollars) 15.5 per cent five-year Fixed Rate Senior Unsecured Green Bond by Access Bank and N8.5 billion (20.5 million dollars) 15.6 per cent 15-year Guaranteed Fixed Rate Senior Green Infrastructure Bond by North South Power Company.”

“On 15 April 2021, North South Power Company (NSP) issued its second N6.33 billion (15.3 million dollars) 10-year 12 per cent Fixed Rate Series 2 Senior Green Bonds due 2031.”

“It is noteworthy that all the corporate and sovereign green bonds are listed on the NGX.”

“These follow-on issuances have further increased investible instruments and deepened the Nigerian Green Bond market.”