28.2 C
Wednesday, March 22, 2023

Government to issue second Green Bond to finance 2018 budget

The Debt Management Office (DMO) on Friday, July 20, 2018 said the Federal Government would issue another Green Bond to finance capital projects in the 2018 budget before end of the year.

Patience Oniha
Ms. Patience Oniha, DG, Debt Management Office

Ms Patience Oniha, DMO Director-General, stated this at the listing ceremony of the pioneer FGN N10.69 billion Green Bond at the FMDQ OTC Securities Exchange in Lagos.

The Green Bonds are fixed income, liquid financial instruments used to raise funds dedicated to climate mitigation, adaption and other environment-friendly projects.

They provide investors with an attractive investment proposition and an opportunity to support environmentally and socially sound projects.

Oniha, who was not specific when the second tranche would be floated, said it would be for this year’s borrowing.

She said the amount to be raised in the second tranche had not been determined by the government.

“It should be for the borrowing of this year, we can’t give you a figure. We have already asked the Federal Ministry of Environment to work towards it,” she said.

Oniha said the Federal Government was excited to midwife the green bond initiative being the first country in Africa to issue sovereign green bond.

“We are excited to midwife this initiative that has put Nigerians in the forefront of something extremely commendable.

“And we have seen same sort of trend in the international market when we approach the market and other African countries will follow suit,” she said.

Oniha said the funds from the N10.69 billion Green Bond and the subsequent ones would be for specified projects from the appropriation act like the Sukuk bond.

“The project will be very specific and would already have been listed in the budget. So, what is required is for them to be part of the budget and to be qualified for green bond financing,” she said.

Oniha said the Federal Government issued a N10.69 billion Green Bond aimed at combating the threat of climate change in line with the Paris Agreement on Climate Change on Sept. 21, 2016.

She stated that the issuance would encourage other categories of issuers including other tiers of government and corporate organisations.

According to her, green bonds provide an additional instrument in Nigeria’s bond market and an investment outlet for environmental conscious investors as well increase the variety of instruments and further deepens the market.

Ibrahim Jibril, Minister of State for Environment, said, “Nigeria takes pride in being the first African country to issue sovereign green bond and only the fourth nation in the world to do so.”

Jibril said the issuance reinforced Nigeria’s re-emergence as a major player in the international climate regime.

He added that it showed President Muhammadu Buhari’s strides in moving the nation towards being a low-carbon economy.

“The issuance of a green bond by Nigeria delivers on programme 47 of its Economic Recovery and Growth Plan (ERGP), in addition to meeting the expectation set out in Article 2 of the Paris Agreement,” Jibril said.

Mr Bola Onadele, the Managing Director, FMDQ OTC, said the exchange would remain committed to the transformation of the nation’s debt capital market.

Onadele said the organisation would continue to work with other stakeholders to deepen the debt market with introduction of new products.

“This year, we introduced sustainability and corporate responsibility goal and we take that seriously and that shows that as an organisation, FMDQ is addressing issues of sustainability,” he said.

By Chinyere Joel-Nwokeoma

Latest news

- Advertisement -
- Advertisement -

You might also likeRELATED
Recommended to you

%d bloggers like this: