At the One Planet Summit convened recently in Paris by President Emmanuel Macron of France, United Nations Secretary General Antonio Guterres, and World Bank Group President Jim Yong Kim, the World Bank Group made a number of new announcements, inclusive is the fact that it will no longer finance upstream oil and gas, after 2019.

The group stated however that, in exceptional circumstances, consideration will be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.

According to the World Bank, the declarations were made in line with its ongoing support to developing countries for the effective implementation of the Paris Agreement’s goals.

As a global multilateral development institution, the World Bank Group (WBG) says it is continuing to transform its own operations in recognition of a rapidly changing world, and to align its support to countries to meet their Paris goals.

Ramping up WBG climate ambition through its Climate Change Action Plan

The WBG says it is on track to meet its target of 28% of its lending going to climate action by 2020 and to meeting the goals of its Climate Change Action Plan – developed following the Paris Agreement.

In line with countries submitting updated and potentially more ambitious Nationally Determined Contributions (NDCs), the World Bank Group notes that it will present a stock-take of its Climate Change Action Plan and announce new commitments and targets beyond 2020 at COP24 in Poland in 2018.

Transparency and disclosure to drive our own decarbonisation

The World Bank Group is working hard to ensure that climate accountability is mainstreamed throughout its operations. In addition to measures already in place:

• Starting next year, the World Bank Group will report greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy. The results will be published in late 2018, and annually thereafter.
• The World Bank will be applying a shadow price on carbon in the economic analysis of all IBRD/IDA projects in key high-emitting sectors where design has begun since July 2017. IFC started using carbon pricing in key sectors in January 2017 and will mainstream the same starting January 2018.

Mobilising Finance for transformation in mitigation and climate resilience

To accelerate the mobilisation of finance:

• IFC will invest up to $325 million in the Green Cornerstone Bond Fund, a partnership with Amundi, to create the largest ever green-bond fund dedicated to emerging markets. This is a $2 billion initiative aiming to deepen local capital markets, and expand and unlock private funding for climate-related projects.  The fund is already subscribed at over $1 billion.
• Last week, the World Bank and the Government of Egypt signed a $1.15 billion development policy loan aimed at reducing fossil fuel subsidies and creating the environment for low-carbon energy development.
• The World Bank Group will continue to support investments highlighted at the One Planet Summit which demonstrate opportunities to crowd in different kinds of finance in transformational areas. This includes accelerating energy efficiency in India; scaling up solar energy in Ethiopia, Pakistan and Senegal among other countries; establishing a West Africa Coastal Areas investment platform to build resilience for coastlines of West African countries (partnering with WAEMU, NDF, GEF, GFDRR, AFD, AfDB); and introducing the City Resilience Platform (partnering with the Global Covenant of Mayors) so that up to 500 cities will have access to finance for resilience to climate change.
• The World Bank Group will continue to work with the United Nations and other partners on the implementation of the Invest4Climate platform, which will systematically crowd in multiple sources of finance, with a major event showcasing investment opportunities planned for May 2018 at the Innovate4Climate conference in Frankfurt.
• IFC will work to set a single unifying global standard on green bonds, similar to the Equator Principles, as a means to facilitate the development of the green bond market to crowd in private finance into climate business. And to stimulate the greening of the financial sector, the World Bank Group will partner with the Sustainable Banking Network (SBN) to provide technical support to develop and implement national Roadmaps for Sustainable Finance in six countries. These roadmaps are based on a framework developed jointly with UN Environment.
• AXA Managed Co-Lending Portfolio Program (MCPP) will allocate a substantial portion of projects to climate-smart infrastructure investments.  IFC and Finland launched the Finland-IFC Climate Change Programme, a €114 million returnable capital contribution to spur private sector financing for climate-change solutions,targeting low-income countries focused on investments in renewable energy, energy efficiency, green buildings, climate-smart agriculture, and forestry.

Working in partnership

To further accelerate climate action, the World Bank Group will be working with various partners to deepen climate action:

• For the first time, all the Multilateral Development Banks and all International Development Finance Club Members issued a joint statement aligning their finance with the Paris Agreement and identifying areas where they will work together to advance climate-smart development.
• Canada and the World Bank will work together to accelerate the energy transition in developing countries and, together with the International Trade Union Confederation, will provide analysis to support efforts towards a just transition away from coal.
• Working with France’s AFD and the Kingdom of Morocco, the World Bank will work to accelerate adaptation in agriculture for Africa.
• The World Bank will support a unique partnership between Caribbean leaders and people, multilateral organisations, and local and international private sector to define a vision for the world’s first climate-smart zone. The key priority areas for action include renewable energy, resilient infrastructure, innovative financing, and capacity building.
• The World Bank Group will support, through the Carbon Pricing Leadership Coalition, the proposed Carbon Markets of the Americas initiative.
• Together with Ethiopia, Fiji, Germany, the United Kingdom and other government, NGO and private sector partners so far, the World Bank will support the new InsuResilience Global Partnership with the goal  of significantly scaling up climate risk finance and insurance solutions in developing countries, with a focus on poor and vulnerable people. It will stimulate the creation of effective climate risk insurance markets and the smart use of insurance-related schemes to protect lives and livelihoods from the impacts of disasters. More than $125 million has been committed to the initiative so far. It is built on strong G20 and V20 support and has 40 members so far.
• The Principles on Blended Concessional Finance, first published in 2013, have been recently enhanced with more detailed guidelines developed by a working group (chaired by IFC) representing Development Finance Initiatives (DFIs) that annually invest more than $35 billion a year in private sector solutions. These principles include promoting commercially sustainable solutions so that the use of scarce public concessional finance is minimised; and state the need for high social, environmental, and governance standards.

On the occasion of International Migrants Day, December 18, the African Development Bank (AfDB) has called on African countries to reconstruct rural areas from zones of economic misery to zones of economic prosperity. This will in turn expand economic opportunities for African youth, leading to improvements in their lives, thereby stemming migration.

Greater economic opportunities will motivate African youth to stay on the continent and live a meaningful life.

More than ever before, Africa must rapidly modernis

e its agriculture and unlock its full potential.

According to Akinwumi Adesina, President of the AfDB, the future of Africa’s youth does not lie in migration to Europe, but in a prosperous Africa.

Addressing the challenges of food insecurity is critical in addressing the more complex issues of migration and displacement. Reducing intercommunal conflict over scarce resources such as water and pasture for animals is also key.

“This requires new agricultural innovations and transforming agriculture into a sector for creating wealth. We must make agriculture a really cool choice for young people,” said Adesina.

“Staple food processing and agro-allied industrial zones will transform rural Africa from zones of economic misery to zones of economic prosperity. These zones will also allow Africa to move into agro-industrialisation and become a global player in feeding the world.”

Taking into account the large and increasing number of migrants in the world, the United Nations General Assembly on December 4, 2000, proclaimed December 18 International Migrants Day. Statistics from the United Nations indicate that more people are on the move than ever before, while each migrant has a unique story to tell about his or her journey.

This mass movement of people along dangerous routes globally inspired the theme of year’s International Migrants Day: “Safe Migration in a World on the Move”. The UN is calling on the world to come together to protect all migrants wherever they are – in countries of origin, transit or destination.

Speaking at the recently concluded 12th African Economic Conference of the African Development Bank, UNDP and UN Economic Commission for Africa in Addis Ababa, December 4-6, 2017, Richard Joseph, a Professor of International History and Politics at Northwestern University, observed how population growth in many African countries continue to exceed income flows.

“Out-migration in such circumstances becomes an option despite the appalling risks,” he noted.

Three challenges, a lack of economic opportunities, conflict, and extreme conditions brought about by climate change are key sources of fragility that often result in the forced migration of peoples desperately seeking alternatives.

President Adesina describes these factors as a “triangle of disaster” that drive conflict and extreme violence, which in turn fan economic or forced migrations as reflected in rural-urban, intra-African or international migrations, leading to significant local and international challenges.

According to the UN, the challenges and difficulties of international migration require enhanced cooperation and collective action among countries and regions.

This is one of the reasons the Bank is accelerating investments to get younger commercial farmers and agribusiness entrepreneurs into agriculture. Already, the African Development Bank has launched a youth in agriculture initiative – ENABLE (Empowering Novel Agri-Business-Led Employment) Youth – to develop the next generation of “agripreneurs” for Africa. Over the next 10 years, the Bank will invest $15 billion to develop new youth agriculture entrepreneurs.

The ENABLE Youth programme has shown that with greater access to agribusiness enterprise, skills, and improved credit, youth can become a driving force of agricultural transformation in Africa, and stem the tide of rural and transatlantic youth migration.

Food security and rural development is interlinked with migration, fragility and resilience, said Khaled Sherif, the Bank’s Vice-President for Regional Development, Integration and Business Delivery. “We acknowledging that youth constitute the majority of African migrants, and for this reason, we have also implemented a Jobs for Youth in Africa Initiative. Our aim is to expand economic opportunities for male and female African youth, in order to create improvements in other aspects of their lives,” he said.

The goal of the AfDB’s $24 billion Feed Africa Strategy is to make Africa self-sufficient in food production within 10 years, drive agro-industrial development, and make the continent competitive in global food and agriculture markets.

The Federal Government plans to issue green bonds worth N10.6 billion to finance renewable energy projects, to protect the environment. This was made known by the Director-General, Debt Management Office (DMO), Ms. Patience Oniha, during the Nigeria Green Bond Investors Forum in Lagos, on Friday, December 15, 2017.

Federal Ministries of Environment and Finance, in collaboration with Green Bond Advisory Group, organised the event.

Abuja had played host to a similar event the previous day.

The DMO DG, in her opening remarks, said the forum was to raise fund for a project, with hope of a bright future.

What are green bonds?

Green bonds are bonds used exclusively to fund projects that have specific environmental and/or climate benefits. They can also be defined as debt instruments issued to raise capital to fund specific clean power projects or projects aimed at reducing climate change risk.

The bonds arose out of investors’ need to invest in high-growth, clean energy sector projects other than through equities and funds.

In 2016, $81 billion worth of green bonds were reportedly issued globally, and about $69 billion worth of green bonds have already been issued this year, with the total projected value at $150 billion.

Nigeria’s maiden green bond issue

Up to N10.69 billion is expected in Series 1 issuance under the N150 billion green bond programme in Nigeria, and the tenor is five years.

The minimum expected subscription is N10 billion, with N1 billion increments. According to the promoters, there should be no fear of under-subscription because the figure is so meagre that what would eventually result is over-subscription.

The book build for the bonds is expected to open on Monday, December 18 and close on Wednesday, December 20. It will be listed at the Nigerian Stock Exchange (NSE) on Wednesday, January 10, 2018.

In her presentation, Deputy Director, Department of Climate Change, the Federal Ministry of Environment, Hajia Halimat Bwari, who represented the Environment Minister, explained climate change/global warming, its causes and effects.

According to her, different parts of Nigeria are diverse in everything, including climate change. She said “while the southern part is at high risk of flood, the northern part is at the risk of dryness”. The middle, she added, experience erosion.

Noting that the Federal Government signed the Paris Agreement in 2015 committing Nigeria to reducing emissions, she said “what we are doing here is part of that commitment.”

She asserted that N142 billion would be required to finance renewable energy projects in the country, adding that the ministry decided to issue the green bond as alternative source of funding because of the huge capital outlay required to finance the nation’s renewable energy projects.

Bwari said the projects would go a long way to reduce carbon emissions in Nigeria, while facilitating the country’s efforts to meet its commitments in the Paris Agreement on Climate Change.

Area of investment

Proceeds of the bonds will be used on: renewable energy micro-utilities, energising education programme, and afforestation programme.

Projects listed in the programme include rural energy access, the great green wall programme, the national clean stoves scheme, the clean energy transportation scheme and the Nigerian erosion and watershed management project.

Upping the gains

The primary aim of the bonds issuance is to have sustainable environment, which the world has been investing hugely in. But the green bond will up the benefit, as investors have been promised return on investment, thereby boosting the economy. The ministry used the sheer butter tree as an instance.

“While the tree provides green environment, the seeds, which are now in high demand, will be harvested and sold,” it said.

Another tree cited was the teak used for electric poles, which has maturation period of seven years; and after harvest, the farmer does not have to plant fresh seeds, as the roots underground will sprout new trees.

Other benefits of the green project are the direct and indirect jobs to be created. Gardeners, foresters and allied workers would have ready jobs.

Why invest in green bonds?

According to Muhammad Mamman-Daura of Chapel Hill Denham Advisory Ltd, investing in the green bond is investing in the future, as green bond is the future. He stated reasons investment in the green bonds is necessary.

• Maiden issuance in Nigeria and Africa. Being the first issue, the risk of losing investment is very low.
• Segregation of issue proceeds and application towards ring-fenced projects.
• Provides competitive investment returns relative to conventional bonds.
• Strong assessment ratings. The country’s strategy earned it GB1 (excellent) in Moody’s Assessment.
• Two-fold contribution to the preservation of Nigeria’s climate and economic development. Environmentalists also have at least one reason to invest – to protect the environment.

PFAs ready for green bond

Stakeholders that participated in the forum include Pension Funds Administrators (PFAs), Federal Ministry of Finance, Inter-ministerial Committee on Climate Change, Nigerian Stock Exchange (NSE) and DMO, among others.

Managing director of Sigma Pensions, Dave Uduanu, who spoke on behalf of the PFAs, said they were happy and ready to work with the Federal Government to make the green bond project work.

By Innocent Onwuji

The Federal Government on Monday, December 18, 2017 offered for subscription by auction N10.69 billion worth of sovereign green bonds, the Debt Management Office (DMO) said.

The offer is in a circular on DMO’s website.

It stated that the five-year tenor bond would mature in 2022 at a coupon rate of 13.48 per cent per annum.

The green bond is being issued following Nigeria’s endorsement of the Paris Agreement on Climate Change of Sept. 21, 2016, with the aim of strengthening global response to the threat.

The DMO circular noted that “proceed from the Green Bond would be used to finance projects in the 2017 Appropriation Act that were certified as green because of their positive effects to the environment.

“Among the projects to be financed with the proceed of the Green Bond Issuance are Renewable Energy Micro Utilities and Afforestation Programmes.’’

With the issuance, Nigeria would become one of the few countries in the world and indeed the first African country to issue a green bond, the DMO said.

It added that the offer would close on Wednesday, Dec. 20.

By Folasade Folarin