…To fund renewable energy, afforestation, dams, among others

By Emma Ujah

The Debt Management Office (DMO) has put on offer an N50 billion green bond on behalf of the federal government.

The Director-General (D-G) of the DMO, Ms Patience Oniha, told investors at a stakeholders’ meeting in Lagos this afternoon that the proceeds would be used to fund several climate-friendly projects such as renewable energy, afforestation, dams and Compressed Natural Gas across the country.

The instrument has a five-year tenor and will be benchmarked against the FGN Savings Bond, which is traded in the nation’s capital market.

According to the D-G, the instrument has become critical for the nation because its entire proceeds would go into projects that would mitigate climate change impact on Nigeria.

According to her, “It is tied to the global policy on climate change and looking after the environment because Nigeria is committed to the global agreements on climate change.”

She noted that Nigeria was pioneering sovereign green bonds, having issued the first African sovereign green bonds in 2017 and in 2019, when N10.69 billion and N15 billion, respectively, were raised.

Ms Oniha said the N25.69 billion raised from the earlier two series went into supporting renewables, afforestation, education and micro-utilities.

“The government continues to mobilise domestic and international climate finance to scale up mitigation and adaptation efforts,” she said.

The DMO boss said that the instrument would be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited to guarantee its liquidity.

Fielding questions from journalists, she expressed the willingness of her office to return to the market with the Green Bond on a regular basis, but that it could only be to the extent of the provisions in the federal government budget.

She urged other corporates to take advantage of the leadership of the federal government in issuing the Green Bond to issue similar instruments in order to better tackle the challenges of climate change which confronts the nation in various forms.

Ms Oniha disclosed that investment into the N50 billion Sovereign Green Bond would be a minimum subscription of ₦10 million and multiples of ₦1 million thereafter.

Dr. Iniobong Awe, the Director of Climate Change of the Federal Ministry of Environment, in her presentation, noted that desert encroachment in Northern Nigeria was a real danger, affecting both humans and livestock.

She said that the federal government was committed to the Climate Change Act of 2021 and its net zero by 2060, supported by policies such as the Nigerian Carbon Market Initiative, the Green

Bond Initiative, the National Council on Climate Change, and a Renewable Energy Policy.

On the Presidential Compressed Natural Gas (CNG) Initiative, Dr Awe said, “The government is investing in infrastructure to support the adoption of CNG and electric

vehicles.”

She added that through the National Greenhouse Gases Emission Monitoring Programme, a comprehensive agenda to monitor and reduce Nigeria’s greenhouse gas emissions, the government was working to drastically reduce emissions in the country.

The net proceeds to be allocated to her ministry, she said, would be tracked to green projects via an appropriately designed internal process to be overseen by the management of the ministry, DMO & Office of the Accountant General of the Federation (OAGF).

Dr Awe said, “This is to be done by crediting the proceeds to a sub-account or a sub-portfolio or otherwise periodic adjustment to match allocations to eligible green projects, investment of unallocated proceeds into liquid money market instruments, and verification of the internal tracking of proceeds is recommended.”