Tuesday, December 19, 2017 /3:20 PM / DMO
Green Bonds, also known as Climate Bonds, are
fixed income securities issued to finance projects that have a positive impact
on the environment and provide solution to climate change. Green Bonds can be
issued by Governments or private sector organizations.
Why Nigeria is issuing green bonds
The issuance of Green Bonds by the Federal
Government of Nigeria will provide funds for financing the implementation of
projects by Ministries, Departments and Agencies towards the achievement of
Nigeria’s commitments to Paris Agreement.
In September 2016, President Muhammed Buhari,
GCFR signed the Paris Agreement on Climate Change, joining other nations to
commit to reversing the negative effects of Climate Change. Under the Paris
Agreement, each country was required to specify the specific efforts it would
undertake to achieve the objective of the Paris Agreement. These commitments by
each country are referred to as Nationally Determined Contributions.
Nigeria’s Nationally Determined
Nigeria has committed to reducing carbon
emissions by 20% unconditionally and 45% with international support by 2030
through energy, transport and agriculture projects that would reduce carbon
emissions and mitigate the effects of climate change in the country such as desertification,
flooding, erosion, erratic rainfall, etc., achieving the NDCs requires the
implementation of various projects in different sectors of the economy which
would need to be financed.
Benefits of the federal
governments= of Nigeria green bonds
The issuance of Green Bonds by Nigeria will have
the following key benefits:
funds for important projects towards protecting the environment and reversing
the harmful effects of climate change.
the commitment of the government to protecting the environment and lead
citizens to take climate change seriously.
a benchmark for subsequent issuances of Green Bonds by state government and
Corporates for financing environmental projects.
an opportunity for investors that are interested in preserving the environment
to contribute to the country’s efforts at environmental preservation, while
earning income from a low risk sovereign instrument.
diversify the Government’s funding sources and deepen the domestic capital
market by providing wider variety of products for investors.
Features of the debut green bonds
· Offer period; December 18- 20, 2017.
· Offer amount: N10, 690,000,000.00
· Purpose: to finance projects in the 2017 appropriation act for
afforestation, renewable energy and the provision of clean energy to support
· Tenor: 5 year
· Guarantee: backed by the full faith and credit of the
· Interest payment: Bi- Annually.
· Warehousing of proceeds: Administrative procedures have been
established to ensure that the bond proceeds are channeled directly to the
started projects in a transparent manner, with periodic monitoring to ensure
that funds are properly utilized.
in Bond Yields amidst OMO Resumption and Weak Inflation Results
Retracement in Bond Yields following NTB Calendar release by the CBN
Summary of FGN
Bond Auction Results for December 2017
Government To Issue Pilot Sovereign Green Bond during the week of December 18,
Sustain Bond Yields at 13.50%
FGN Set to Issue
Debut Green Bond in the Domestic Market
Bullish bond Auction to take yields to Sub-13% Levels
Market reacts to
DMO’s NTB Redemption Notice
N198.032billion of Nigerian Treasury Bills Maturing in December