Marrakech, Morocco — Plans to fund projects that have environmental benefits have begun with the Federal Government's release of guidelines for the Green Bonds that target N78 billion in climate finance.
Under the guidelines, some sectors that provide national projects to be studied and developed further have been identified.
The proposed key areas include environment (reforestation- Jathropha), agriculture (smart agriculture - biofuel/ Jathropha), power (off grid solar), Federal Capital Territory (energy efficiency-transportation).
Fresh details also emerged that the World Bank is about supporting and providing specialists to assist in detailing the projects that are identified while the United Nations Environment Programme (UNEP) with Climate Bonds Initiative is providing advisory support to the issuance process.
The U.K Department for International Development (DFID)/Nigeria Infrastructure Advisory Facility also continues to provide support to the management of the various aspects to the process that involve dialogue across ministries and agencies.
Minister of Environment, Amina Mohammed, who spoke at the side event organised by the Nigerian government on the theme "Exploring Alternative Sources of Funding for Climate Change Initiative: Sovereign Green Bonds and the Role of the Private Sector in Green Economy in Nigeria," said that this was an opportunity to leverage aspects of the climate agenda that contribute to the countries development objectives.
Resources needed to finance Nigeria Nationally Determined Contributions (NDCs) is put at $142 between now and 2030. The issuance of Green Bonds, which have grown from $3billion per annum since 2012 to an estimated $100 billion for 2016 present a viable option. Last year was another record year for labeled green bond market, with over $42 billion issued.
She explained: "The process of project selection draws from existing sector strategies, meaning that interventions are owned by the sectors and resources are part of existing plans, only in this case being given a 'green' demarcation.
"It has been iterative, resulting in an initial list of 56 projects, with a total amount of N42 billion to a current list of 19 projects with a total amount of N36 billion)," she said.
"Nigeria has a fairly active bond market with diverse maturities and yields, but its products are not diverse. A green bond creates an opportunity to introduce some diversity. Getting this to work has brought to the table the Ministry of Budget and National Planning, the Debt Management Office and Pension Commission," the minister added.