The Nigerian Stock Exchange (NSE) will today list the FGN N10.69 billion Green Bond on the Exchange, as part of efforts to make Nigeria one of the favoured investment destinations in Africa.
Nigeria became the first the first nation to issue a climate bonds certified sovereign green bond, the first African nation to issue a sovereign green bond and the fourth nation in the world to issue after Poland, France and Fiji.
Green bonds are fixed income, liquid financial instruments used to raise funds dedicated to climate mitigation, adaptation and other environment-friendly projects. This provides investors with an attractive investment proposition and an opportunity to support environmentally and socially sound projects.
Market analysts had said considering that Nigeria derives more than 90 per cent of its export income from crude oil, the push for green bonds to support initiatives aimed at moderating climate change by investing in solar plants, hydro power and agriculture is particularly noteworthy.
Former Minister of Environment and now Deputy Secretary-General of the United Nations, Ms. Amina Mohammed had last year commended NSE for conceptualising the idea of the green bond.
“The NSE sowed the seeds, they talked to me about sustainability principles and what business could do. We thought ‘hey what about green bonds’ – Nigeria was looking for an instrument that worked with its ‘Intended Nationally Determined Contribution’ and its national strategy to bring jobs and green infrastructure investment. Green Bonds provides a new product with new credentials that investors could buy into, which has gone through a vigorous process to ensure transparency, accountability in use of funds and is environmental friendly,” she said.
According to market operators, sovereign green bond represents a new stage in the development of the Nigerian capital markets and opens the way for further corporate issuance and international investment. The NSE is playing a key role in helping to develop this enormous opportunity for Nigeria while fulfilling one of its key objectives as a member of the UN Sustainable Stock Exchange Initiative.
Market operators have called on government to implement tax incentives to issuers, while grant schemes should also be instituted to address some of the costs of issuing bonds for corporates including independent reviews and project assessment and evaluation.
Meanwhile, the stock market continued with its losing streak with the NSE All-Share Index depreciating further by 0.76 to close at 36,470.05.