Lagos: Nigeria is taking a significant step in tackling climate change with the issuance of a N50 billion Sovereign Green Bond. Dr. Patience Oniha, Director-General of the Debt Management Office (DMO), highlighted this initiative at an investors meeting for the Series III Sovereign Green Bond issuance on Monday. The initiative aims to fund environmentally sustainable projects and reinforce Nigeria's commitment to the Paris Agreement.
According to News Agency of Nigeria, this new offer marks a continuation of Nigeria's climate financing journey following earlier issuances in 2017 and 2019, which raised N25.69 billion. The five-year Green Bond seeks to provide funding for projects aligned with Nigeria's Nationally Determined Contributions (NDCs) to reduce greenhouse gas emissions. Oniha emphasized the importance of sensitizing investors about the bond's amount, tenor, and intended use of funds, aligning with the nation's commitment to sustainability.
The five-year bond, targeted at institutional investors with a minimum investment of N10 million, will be listed on the FMDQ platform. Oniha explained that while the bond market in Nigeria is well-developed, price discovery would remain guided by market expectations.
Dr. Iniobong Abiola-Awe, Director of the Department of Climate Change at the Federal Ministry of Environment, stressed the urgency and purpose behind Nigeria's green financing drive. She noted that climate change poses an immediate threat to humanity and biodiversity, manifesting in shifting weather patterns, extreme heat, rising floods, and desert encroachment. Abiola-Awe described the Green Bond initiative as part of Nigeria's broader framework to fulfill global climate commitments under the Paris Agreement and the UN Framework Convention on Climate Change.
Abiola-Awe stated that Nigeria is committed to reducing greenhouse gas emissions by 20% unconditionally, and up to 47% with international support. She highlighted that these bonds are not just financial tools, but part of a homegrown, innovative solution to climate finance. Initiatives like the 2021-2030 Climate Change Policy, Energy Transition Plan, afforestation strategies, and renewable energy projects are building capacity to mitigate climate impacts. The issuance of this sovereign green bond underscores Nigeria's commitment to environmental and climate action goals, aligning with the President's renewable energy agenda.
Previous green bond issuances have supported projects across various sectors, including agriculture, energy, and transport. The proceeds from these issuances have funded critical projects, such as energizing education initiatives in Nigerian universities, which improved internet access, increased study hours, and raised academic performance. The Federal Ministry of Environment, in partnership with the Ministry of Finance, has provided the policy and institutional frameworks for these issuances, supporting sectors like agriculture, energy, transport, and forestry.
Abiola-Awe concluded by affirming Nigeria's commitment to consistent and sustainable financing for climate action, emphasizing that while the time to act was yesterday, today's actions represent significant contributions to climate mitigation. The event also acknowledged Nigeria's legal and transaction advisors on the Green Bond.
The Private Debt Market Makers (PDMMs) were encouraged to support the new issuance with confidence, especially with the successful repayment of earlier bonds.