FG Invests N50bn from Green Bond into Climate Resilience and Clean Energy Initiatives

The federal government, through the Debt Management Office (DMO), has kicked off its third Sovereign Green Bond, aiming to raise up to N50 billion. This bond is part of Nigeria’s effort to fund environmental and infrastructure projects across the country.

Patience Oniha, the DMO’s Director General, emphasized that this green bond is crucial for Nigeria’s climate finance strategy and showcases the country’s commitment to environmental leadership in Africa. The bond, a fixed-rate note maturing in five years, is co-arranged by Chapel Hill Denham Advisory Limited and Stanbic IBTC Capital Limited. Since it is backed by the federal government’s credit, it presents a strong investment opportunity for banks and institutional investors.

This new issuance follows the success of Nigeria’s previous green bonds launched in 2017 and 2019, which were both oversubscribed. These funds have helped finance renewable energy, afforestation, agriculture, and clean transportation initiatives.

According to the investor presentation, proceeds from this bond will support various climate projects, with significant allocations including:

• N15.96 billion for climate adaptation under the Federal Ministry of Environment.
• N15 billion for clean energy projects, including infrastructure for electric vehicles.
• N16.4 billion for water infrastructure improvements, such as building new dams and upgrading existing water supply systems.

Oniha stated at the bond’s launch, “We are backing government efforts to support our environment. This is a critical step in fighting climate change, and we need the funding to make progress.”

Dr. Iniobong Awe, from the Ministry of Environment, mentioned that Nigeria has pledged to cut emissions by 47% as part of the Paris Agreement. This includes a range of initiatives related to agriculture, oil, gas, and energy, aiming for robust climate change mitigation.

After the offer closes, results will be disclosed on June 20, with the bonds set to be listed on the Nigerian Exchange Limited and the FMDQ Green Exchange on July 7. This dual listing is meant to enhance transparency and liquidity for investors interested in green assets.

Recent data underline the urgency of Nigeria’s green transition. The country ranks 140th out of 180 in the Environmental Performance Index, highlighting the critical need for sustainable practices.

The global trend towards green investments shows that consumers and investors increasingly favor eco-friendly initiatives. For example, a recent survey indicated that 85% of investors would consider changing their investment strategies to prioritize sustainability.

As countries worldwide shift focus toward climate action, Nigeria is positioning itself as a leader in this vital movement, and this bond is a significant step in that direction. It represents not just an investment but a commitment to a sustainable future for all.

Source link