18 December 2017

Nigeria's Green Bond Tops Climate Change Financing Talks

To meet up with the year 2030 target of Nigeria's Nationally Determined Contributions (NDC) in reducing the threat of Climate Change by two per cent per year, the private sector has been challenged to invest in the Green Bond Initiative of the government.

The Deputy Director, Department of Climate Change of the Federal Ministry of Environment, Halima Bwari gave the charge at the Green Bond Investor's Forum organized by the Ministry, the Department of Debt Management (DMO) in Lagos at the weekend.

Others at the forum also include; Pension Fund Administrators, banks, Not-For-Profit Environmental Organisations amongst others.

Green bonds are used exclusively to fund projects that have specific environmental and Climate Change benefits. They are also debt instruments issued to raise capital to fund specific clean power projects or projects aimed at reducing climate change risk.

Prospective investors must focus on projects that have climate credentials, which are also captured in the nations' budget. Such includes; Energy efficiency, resource efficiency, renewable energy, clean technology and sustainable forest management.

Currently Nigeria requires the sum of $142 billion to implement projects in the identified priority sectors, this, she noted could not be achieved without the engagement of the private sector adding that the green bond as the first in Africa and possibly second in the world, is an innovative source for implementing the NDC.

According to her, the key requirements for the bond issuance include that the projects should be green in nature; costs should form part of the Medium Term Sector Strategies (MTSS) of selected MDA.

Speaking further on the initiative, a senior officer from Chapel Hill Denham Advisory Limited, Muhammed Mamman Daura said the scope of the advisory assignment is to ensure that the Federal Government (FG) integrates periodic issuance of green bonds into its borrowing plan, ensure the Federal Government has adequate capacity to monitor the use of issuance proceeds and the development of projects consistent with the Green Bond guidelines.

He added that the guidelines is also to provide support to the Federal Ministry of Environment in its implementation of the Green Bond guidelines to maintain a transparent and consistent process, coordinate capacity building across FG MDAs.

The Director General of Debt Management office (DMO), Mrs. Patience Oniha in her remarks stressed that the essence of the bond is to show that the Federal Government of Nigeria has key into the 2015 PARIS Agreement, which it signed, and promote financial inclusion in the country.

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