Nigeria's Green Bond Is Finally Here
After months of delay, Nigeria is finally ready to issue its first green bond.
In case you are wondering what a green bond is, it is a debt instrument that the federal government is dedicating to environmental concerns.
About 20 billion Naira is expected to be raised from the first tranche, which would become available for investors in a few weeks.
Nigeria is the first in the emerging market to issue a green bond.
Former environment minister, Amina Mohammed, who is now Deputy Secretary-General of the United Nations, told the Thomson Reuters Foundation proceeds from the sovereign bond would be used to fund renewable energy, transport and agriculture projects.
Nigeria's green bond could lay the groundwork for other African countries to follow suit, she added.
Mohammed, who initiated the Nigerian bond while she was environment minister, said its issue had been postponed from an initial date at the end of March because the country's budget had to be passed first.
"We've just had the budget approved, so I believe Nigeria will look, probably within the next few weeks, to doing (the bond issue)," Mohammed said on Thursday on the sidelines of a U.N. conference in Mexico on disaster risk reduction.
Announcing the plan for the bond in February, the environment ministry said it was aimed at widening Nigeria's funding options and diversifying the OPEC member's oil-dependent economy, which is the largest in Africa.
Peter Tarfa, director of the climate change department in the environment ministry, told a separate conference in Barcelona this week that the bond would be launched in the coming month, and would generate resources for climate change projects, including forest-planting and a mass rapid transit system.
“The total amount raised, including a second tranche targeted for September, would be more than 45 billion naira,” he said.
The green bonds, he added, "have the potential to deliver the low-carbon, climate-resilient infrastructure needed in Nigeria... with access to private capital at scale”.