N20bn Green Bond To Address Infrastructure Challenges, Says Acting President
The Acting President, Prof. Yemi Osinbajo said, the first sovereign green bond of N20 billion to be launched in March, 2017, would be used to fund a range of climate-related initiatives including renewable energy, solar unit, mass transit and land re-afforestation, projects.
The Sovereign Green Bonds project is part of a strategic process by the Federal Government to widen the nation’s funding options to catalyse economic rebound and offer the vast majority of Nigerians vibrant funding new alternative.
Speaking at the Green Bonds Conference held by the Nigerian Stock Exchange (NSE), yesterday in Lagos, the acting president said, said a lunch of Africa’s first Sovereign Green Bond, a brand new addition to the Nigerian capital market instruments funding portfolio.
According to him, “Green Bond is a crucial achievement for Nigeria’s determine battle against the consequences of climate change, a phenomenon which in many ways is an important to livelihoods and development of today.
Osinbajo said the Green Bond is an opportunity to deepen Nigerian capital market and to combat poverty.
Itemizing the projects that will benefit from the Green Bond fund, acting President said Solar Unit Distribution Programme (SUDIP), Renewable Energy Micro-Utilities in 45 communities, Energizing Education Program (EEP), FCT Bus Rapid Transport and Aforestayion Programme are major projects targeting by the government.
“Power has posed a major challenge and barrier to effective learning institutional operation and student residences in our universities, this programme would improve access to power to 37 federal universities and 7 university teaching hospitals across the country. It would also impact the residents of surrounding communities in the total of about 1.1 million people. In total a 119 megawatt of power would be provided in this scheme out of which 60 megawatt would be solar power”, he said.
He stressed that, issuing Green Bonds is to support the shift to non-oil base assets and attract private capital to finance the assets at a challenging time to Nigeria economy.
Doing this as a sovereign gives us the opportunity to laying strong foundations that serve broader market to bond issuers and pipeline of projects to states, he said.
Also speaking, the minister of Environment, Amina Mohammed said the Green Bonds process is an attempt by the environment sector to contribute to the current administration’s efforts to diversify the economy, create jobs, improve security, provide a framework for sustainable development and deliver on the Paris agreement.
Under the Paris agreement, the minister said the developed countries reaffirmed their commitment to mobilise $100 billion of resources by 2020 to support developing countries ‘enhance the implementation of their policies, strategies, regulations and action plans and their climate change actions with respect to both mitigation and adaptation.
“The Paris Agreement which was signed by Mr. President enabled us to develop our Nationally Determined Contribution (NDC) and constitute the Inter-Ministerial Committee on Climate Change charged with the responsibility for cross sectoral integration of Climate Change issues into main stream planning and also to identify a pipeline of projects which the Green Bonds will fund. The delivery of Nigeria’s NDC will require a fundamental re-orientation of financial flows within the economy. Capital will need to flow toward low-carbon, climate resilient opportunities and away from carbon intensive, polluting activities or those that exacerbate climate vulnerability leading to poverty, insecurity, reduced health quality”, she stated.
She believed that the process will see Nigeria launching the first Sovereign Green Bonds in an emerging market began as a seed which was sown by the private sector.
According the environment minister, the government’s new proposed economic recovery and growth plan identifies the Green Bonds as one of the alternative sources of financing. The plan also has significant overlaps with our NDCs on objectives for power, transport and agriculture.
She affirmed that, the ministry of environment itself will be part of the issuance process stressing that, it has provided the framework and guidelines, produced as part of the establishing processes essential to ensure that projects funded by green bonds have climate credentials.
The Ministry of Finance through the Debt Management Office who are responsible for managing the process have been instrumental to laying solid foundations for this process, she said.
“The improving partnership with government and the private sector will keep the momentum of the Green Bonds process. It provides opportunities for the private sector to being the process of connecting the three strands of sustainable development economic, social and environment for long term Sustainable Development”, Mohammed said.
