Federal Government of Nigeria Green Bond Series II oversubscribed
Abuja, Nigeria 11th June 2019 – The Federal Government of Nigeria through the Debt Management office has conducted a second issuance of 15 billion Naira its Green Bond series. This was made possible with the financial and technical support by the World Bank funded Nigeria Erosion and Watershed Management Project (NEWMAP) as well as the Federal Ministry of Environment, Department of Climate change(DCC)
This green bond is the second series to be issued by an African Sovereign, the first also attributed to Nigeria. The FGN green bond program is a partnership between the Ministry of Finance and the Ministry of Environment. It receives technical support from the World Bank through its Nigeria Erosion Watershed Management Program (NEWMAP) warehoused within the Ministry of Environment and Department for International Development (DfID).
The Ministry announced that its second green bond has been oversubscribed by more than 2x. The FGN launched its pilot green bond in December of 2017 for N10.69b to fund themes in its NDCs. This represents part of its commitment to the Paris agreement and as a signatory to the Helsinki Principles, in ensuring a stronger linkage between public finance and climate action
The green bond series II was issued for N15b to fund three themes in its NDCs, renewables, sustainable forest management and clean transport. This issuance also resulted in an expanded pool of ministries departments and agencies participating, from 2 in the pilot to 6 in this second green bond. The green bond is expected to be priced at 14.5% for a tenor of 7 years.
The Permanent Secretary Ministry of Environment said, “This green bond not only reinforces the federal government’s commitment to addressing climate change but also in funding components of its National Development Plan that overlap with the NDCs and contribute to economic growth.”
The Federal Government of Nigeria launched its National Development plan, the Economic Recovery and Growth Plan (ERGP) in 2016. Program 47 of the ERGP has the objective of regular issuance of green bonds to address climate related issues. The green bond has been administered through a green bond advisory group which is made up of public and private sector representatives, development partners (World Bank, IFC and African Development Bank) as well as Capital Market Operators.
Ms. Patience Oniha, Director General, Debt Management Office said, “DMO is committed to ensuring that the FG is able to raise resources through financial instruments that meet the expectations of the global climate community and compliment the FGs cost of borrowing. This second green bond issuance builds on the experience from the first bond, giving us confidence to do more”
Similar to the first green bond the rating agency Moody’s completed an assessment of the green bond using its Green Bond Assessment which is based on the International Capital Market Association’s Green Bond Principles (GBP). The series 2 bond was assigned GB1 (excellent), the highest level in its ranking.
Dr. Peter Tarfa, Director Department of Climate Change said, “The continued issuance of green bonds enables the FGN to assemble a portfolio of climate interventions that can be used to aggregate emissions information for state and non-state actors as part of fulfilling our reporting obligations to the global climate community.”
Obi Ugochuku, Adviser Climate Finance, Ministry of Environment said, “This green bond provides a new financial instrument for the Nigeria capital market, allowing investors to diversify their portfolios while providing resources to address the issue of climate change.’
June 11, 2019