A big first for Africa and a big step for green finance - Nigeria aligns sovereign issuance to best practice model, pointer for nations to follow
What's it all about?
Nigeria has given the 'Year of Sovereign Green Bonds' a late December boost, becoming:
- The first African nation to issue a sovereign green bond,
- The first Climate Bonds Certified sovereign bond, and
- (Only) The fourth nation in the world to issue one - after Poland, France, and COP23 President, Fiji.
The debut NGN10.69bn green bond has been described as a “pilot sovereign” of a foreshadowed NGN 150 billion green bond program by the Ministry of the Environment and has come to market after an extensive development process involving domestic and international stakeholders.
The 5-year bond settles on December 22nd with a Debt Management Office Fact Sheet setting out a climate based rationale to the issuance. Chapel Hill Denham is the financial adviser.
Green light from Moody’s, DNV GL and Climate Bonds
Moody's Investors Service has assigned a Green Bond Assessment of GB1 (Excellent) to the issuance and is expected to be listed on the Nigerian Stock Exchange (NSE) by the Nigerian Debt Management Office (DMO).
In a statement issued on Dec 13th, Rahul Ghosh, a Moody's Senior Vice President said: “…the Government of Nigeria has put in place a comprehensive governance structure and framework that is aligned with the country's domestic green bond guidelines and international best practices.”
Climate Bonds worked in partnership with Moody’s on the review processes and global verifier and sustainability experts, DNV GL, provided the assessment of the bond towards the Climate Bonds Certification, against our international Standard, the first sovereign issuance to attain this best practice recognition.
The bond will fund a range of renewable energy, afforestation, and environmental projects.
Continuing support for the overall program via the Green Bond Private Public Sector Advisory Group, which comprises of external development partners: World Bank, IFC, African Development Bank, UNEP and the Climate Bonds Initiative, and also includes independent regulators, capital market operators, and relevant ministries.
Who’s saying what?
The Honourable Minister for State for Environment, Ibrahim Usman Jibril:
”Climate Change is real, and business, government and the capital market need to work together to slow its effects. This pilot green bond, which we expect to be the first of many more, has developed the platform to address the nation’s target of reducing its emissions by 20% unconditionally and 45% conditionally by 2030.”
Climate Bonds Director of Market Development, Justine Leigh-Bell:
“This debut sovereign issuance is part of Nigeria’s many efforts directed towards its Paris based NDC commitments. National leadership combined with international support has achieved the first stage of a long-term green investment pipeline. The wider objective is to build capital flows across Nigeria’s vast economy that contribute towards domestic climate and environmental goals.”
The Last Word
International support and best practice
Initially mooted in May 2016 by the then Environment Minister Amina J. Mohammed, and supported by Finance Minister Kemi Adeosun, the Nigerian green bond goal gained widespread attention after being formally announced by President Buhari at the October 2016 signing of Nigeria’s Paris Accord NDC commitment during Climate Week NYC.
Since that announcement by the President, support and assistance has come from many quarters with the UNEP Inquiry, Nigerian Stock Exchange (NSE), Citi Bank, Chapel Hill Denham, World Bank and EY all playing a positive role and FSD Africa providing vital funding.
At Climate Bonds we’re happy to publicly congratulate Nigeria on their leadership, now the flag bearer for green finance in Africa. Formal acknowledgement must also go to all of the organisations that have helped along the way.
Well done!
‘Till next time,
Climate Bonds
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