[Nigeria] DMO lists $30 million sovereign green bond on NSE
The Nigerian Stock Exchange (NSE) has announced the listing of the N10.69billion, approximately $30 million, 5-year, Federal Government Sovereign Green Bond at coupon rate of 13.48% on the Exchange by Debt Management Office (DMO).
On the same day, the NSE also held a pre-listing conference for market participants, themed, ‘Exploring the Green Financing Opportunity: Green Bonds and Enabling Frameworks’ to highlight the opportunities available within the Green Bond market in Nigeria.
The event had in attendance about 200 market operators, government officials, c-level executives, as well as top officials from the academic and sustainability sector. The event was headlined by Ms. Pat Oniha, DG, DMO, Hon. Ibrahim Usman Jibril, the Honourable Minister of State for Environment, and Ms. Amina J. Mohammed, United Nations Deputy Secretary General, represented by Mr. Edward Kallon, UN Resident/Humanitarian Coordinator, UNDP Resident Representative and Chapel Hill Denham, who is the financial adviser to the transaction.
The Sovereign Green Bond is part of a strategic process by the Federal Government to add to the nation’s funding options to catalyze the rebound of the economy and offer the vast majority of Nigerians, a new alternative.
The listing of this Sovereign Green Bond, which is the country’s first ever certified green bond and the first in an emerging market, is a testament to NSE’s continued vision of pushing green finance and more broadly, the sustainable development agenda in Nigeria.
In his address, His Excellency, the President of the Federal Republic of Nigeria, Muhammadu Buhari, GCFR, represented by the Honourable Minister for State Environment, Ibrahim Usman Jibril, expressed delight to witness the listing of Nigeria and Africa’s first Sovereign Green Bond on the Exchange. “The listing of the Green Bond represents fulfilment of a key goal of Program 47 of the Economic Recovery and Growth Plan (ERGP), the issuance of Green Bond. The Federal Government through the Ministry of Environment and the Ministry of Finance is proud to be a champion of this initiative".
President Buhari commended NSE for conceptualizing the idea of Green Bond. “The NSE reached out to the Ministry of Environment in 2016 with a proposal for the issuance of a Green Bond. The consultation which emerged created a platform for mutual learning for the Ministry and capital market community. Our collective effort has created a product that is not just novel but premier. There is plenty to celebrate even as we work towards another issuance of N208 billion on the back of the recently signed 2018 budget”.
Commenting on the listing, the Chief Executive Officer of The Nigerian Stock Exchange, Mr. Oscar N. Onyema OON said, “Admitting the first ever sovereign green bond in an emerging market is yet another milestone for the Exchange and is a further affirmation of our unique platform to support both the Federal Government and businesses to access capital for sustainable initiatives. We are indeed elated to see the materialization of Green Bonds in our market, and to observe its adoption by other actors towards the development of the sustainable finance sector in Nigeria”.
“We applaud the Federal Government of Nigeria and the DMO for the unwavering commitment to deepening and developing the Nigerian capital market. I thank Her Excellency, the Deputy Secretary General of the United Nations, Ms. Amina Mohammed, who was central and immensely instrumental to the success of this landmark initiative, as well as all members of the Green Bond Advisory Group who worked earnestly to actualize this issuance”.
In her statement during the listing ceremony, the Director General of DMO, Mrs. Patience Oniha, stated that, “The Green Bond Listing is an opportunity to enable Nigeria tap into the growing global market for green bonds, which as of end of 2016 comprised of $576billion of unlabeled climate-aligned bonds and $118billion of labelled green bonds according to Climate Bonds Initiative in London. The DMO is proud to list the N10.69 billion FGN Green Bond 2022 on the NSE and expects that trading this instrument will not only bring about Climate Change Awareness but will also diversify the Nigerian Capital Market and attract more investors”.
The Green Bond issuance and listing follows Nigeria’s endorsement of the Paris Agreement on Climate Change on September 21, 2016. The Paris Agreement aims to strengthen the global response to the threat of Climate Change.
Since the signing of the Agreement, various countries that are parties to the Agreement have initiated several steps aimed at making the environment better.
It will be recalled that, NSE, in collaboration with Federal Ministry Environment, Federal Ministry of Finance and Debt Management Office hosted a high profile conference themed “Green Bonds: Investing in Nigeria’s Sustainable Development” in 2016 that provided an opportunity for the government to engage the capital market stakeholders. The conference was a major step towards the issuance of Nigeria's first sovereign green bond.