Nigerian issuers and institutional investors are now hungrier for a thriving Green Bond market with the Securities and Exchange Commission (SEC) making commitment to formally approve guidelines for the new market.
Increased demand drove global Green Bond issuance to a record $155.5billion in 2017 even as 37 countries from all continents have issued over 1,500 Green Bonds which represent 78percent growth from 2016 level.
Rising from a two-day interactive session put together by FMDQ OTC Securities Exchange, in partnership with reputable institutions such as FSD Africa and Climate Bonds Initiatives, regulators, potential issuers, and investors on Thursday June 7, 2018 launched the Nigerian Green Bond Market Development Programme.
Green Bonds are fixed income (FI), liquid financial instruments used to raise funds dedicated to climate mitigation, adaption and other environment-friendly projects. They provide investors with an attractive investment proposition and an opportunity to support environmentally and socially sound projects.
Governments, States, Municipals and Corporates can issue Green Bonds while individuals, companies and institutional investors can invest in Green Bond.
The Securities and Exchange Commission (SEC) will any moment from now formally approve the rules for Nigeria’s Green Bond market, Mary Uduk, acting Director General, SEC said at the event attended by many key public and private sector players.
“Green Bonds will help deepen the Nigerian capital market. The opportunities have positive impact on the economy. We are engaging other development partners to help us build internal capacity that will help reduce regulatory turnaround time. The Green Bond issuance comes under the purview of the SEC. I want to believe that it will not be difficult. I don’t think Nigeria will find it difficult to develop the Green Bond market. I also want to believe that when it comes to disclosure, all it must be done well,” Uduk said.
Justine Leigh-Bell, director, market development, Climate Bonds Initiative said at the event held in Lagos that there are currently 239 different issuers and 146 new issuers of Green Bond”, adding that “Nigeria is among the countries that have done something nice about Green Bond.”
“There is so much to learn because globally, we are not meeting demand. I can honestly say that I see more coming out of Nigeria because transparency, management of proceeds, reporting, independent verification, green definition have all been captured in this whole process.
“What we are offering is trust. It is all about new economic reality in development agenda. It is all about Nigeria building its future in a sustainable way. Transparency is the selling point in Green Bond market both on the side of the issuer or investor”, Leigh-Bell told the teeming audience at the launch.
“I am surprised with the sophistication of Nigeria capital market structure. We saw the need to engage stakeholders and the community on Green Bond market development and find out what their concerns are and the opportunities. But the reality is that whether developed, developing or emerging economies, every country in the world is facing climate change,” Leigh-Bell noted.
Bola Onadele.Koko, Managing Director/Chief Executive Officer, FMDQ OTC Securities Exchange is optimistic that FMDQ pursuit to develop a Green Bond market in partnership with reputable institutions such as FSD Africa and Climate Bonds Initiative will help address infrastructural gaps and environmental challenges in a sustainable manner and deliver prosperity for Nigerians.
“From the Green Bond perspective, we stand as advisors to package the instrument and present to the market with the objective of impacting the environment and economy as a whole” said Dipo Wintoki, executive director, Eczellon Capital.
“We need to see support from the government backing such initiatives. I am actually happy with what SEC is doing to issue a guideline to that effect. We need to see government policies backing this new direction. We see a lot of interest from the investor space. I see it as an impact bond on environment and job creation,” he added.
“The tremendous opportunity that Nigeria has is the one Green Bond and sustainability financing provides. Green Bond and Sustainability Financing provide us with the opportunities to develop our infrastructure”, said Bolaji Balogun, Chief Executive Officer at Chapel Hill Denham, who is also the chairman of Lafarge Africa Plc.
Greg Jobome, executive director, Access Bank Plc who was among the panelists said “the whole thing is all about re-enforcing what we already believe in. It is easier for us and more impactful for us.”
“The opportunity to begin doing something now is huge. Let us start with digital technologies. All I am saying is that there is a lot to do and the journey is starts now. It is now easier to communicate with the investing community outside Nigeria. The message is that all what is needed to be done must be in a structured manner. The selling point is deciding that you want to do so. Access Bank decided that it wants to do it about 10 years ago. This is evidenced in our sustainability, credit risk, retail units and others already existing in the bank,” he added.
Iheanyi Nwachukwu
