The Debt Management Office (DMO) has opened the bid for the third sovereign green bond, offering N50 billion to investors in support of environmental sustainability and climate action projects in Nigeria.
This third issuance marks the return of green bonds six years after the second tranche worth N15 billion was released in 2019.
Speaking at the launch, the Director General of the Debt Management Office, Patience Oniha, emphasised the importance of the bond, describing it as a response to the increasing climate change.
“We all know the environment has not only changed but it’s still changing, we know about the climate and it is very hard to deny, so even if there were people who were in denial previously, it is really hard now to deny that there’s something called climate change and that if we don’t take actions, the implications on us humans and our entire environment, whether it be the waters or the livestock or whatever, are very high,” she said.
She said the green bond, which has a five-year tenor, will be guided by the federal government’s five-year bond currently trading on the FMDQ, adding that the FMDQ rate would serve as a pricing guide to determine the interest rate.
“The tenor is five years and we have a FGN bond for 5 years trading on the FMDQ, so that will be price guidance. I don’t say that it is the price; it is only a guide,” she said.
She highlighted the use of the proceeds for the projects, saying it included climate change adaptation & mitigation initiatives valued at N15.9m, development of local infrastructure, conversion to CNG and electric vehicles under the clean energy transition initiative valued at N15m.
Other projects are construction of three earth dams (Kaglo, Maiyama, Bunza) valued at N9.3M, construction of Dange Earth Dam valued at N6m and rehabilitation and upgrading of Buruku/Gboko water supply valued at N1m.
The Director, Climate Change, Federal Ministry of Environment, Dr Iniobong Abiola-Awe, stressed that the bond would aid the country to meet its commitment to tackle climate change under the Paris Agreement.
“Nigeria has committed to 20% reduction of the global greenhouse gas emissions, and also that is unconditional, and also up to 45% conditional with international support, and this is where I find our home made and home-grown innovative financing, which is green bonds exciting.
“And so, what we’re doing is one of the biggest things we should do in Nigeria to ensure that we meet our obligations globally. The Federal Ministry of Environment, in collaboration with the Federal Ministry of Finance, has devised frameworks to guide and support the issuance of green bonds to fund eligible climate projects in Nigeria,” she said.
She emphasised on the need for investors to support the federal government in achieving its climate change goals.
“Nigeria has developed an energy transition plan, and that plan is huge. It consists of renewable energy, of different aspects of renewable energy. It is something that we need investors, we need financers, support to make this happen. We also have Nigeria having the need for afforestation and reafforestation programmes to reduce greenhouse gas in the sector of agriculture and forest,” she said.
