The Lagos State government on Tuesday signed a memorandum of understanding (MoU) with FMDQ Group and Financial Sector Deepening Africa to raise bond for the Lagos Green Bond Market Development Programme expected to range between N25 billion and N100 billion.
Speaking at a ceremony to commence the framework for managing the bond, the state governor, Babajide Sanwo-Olu decried that climate change, though affecting everyone is expected to hit developing countries the more, especially low-lying states such as Lagos.
He observed, however, that despite its devastating effects, ‘climate change is being increasingly viewed as a gateway to new business opportunities, opening many profitable ways for investors to help protect the planet. One such way is through Green Bonds’.
“Lagos State is particularly mindful of the effects of climate change and, as such, has shown and continues to show its commitment to achieving the Sustainable Development Goals (SDGs), a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
“To achieve these lofty goals, however, funding is required – far in excess of what the state can currently generate – and very urgently. The financial sector will, therefore, need to play a vital role in accelerating the local market’s ability to provide the required support, by expanding to green lending as an alternative source of funding for financing eligible green projects and assets in Lagos State.
“That is what we see here today, and I heartily commend and thank our partners, the Financial Centre for Sustainability (FC4S), FMDQ and FSD Africa, funded by the UK Government, who are supporting this development programme.
“This Green Bond Framework Development Programme is a crucial first step towards creating a viable financing option for future green and sustainability projects. There is no doubt that Green Bonds can assist in unlocking sustainable investment opportunities in Lagos State, opening the door to advance adoption of innovative new technologies, financing of projects that provide green jobs, and promote economic and climate resiliency.
“With an expected population growth to 40 million inhabitants by the year 2050, the government is saddled with not only delivering on economic growth, but mitigating against adverse effects of climate change and waste generation. These are all opportunities that Green Bonds can be used to address.
“As a government, we are committed through our SDG-aligned development agenda (known as THEMES) to utilise our very limited resources more efficiently for which circular economy is a promising and viable alternative. Public spending and investments by itself may not be enough to deliver on circular societies, therefore the need to channel more private investments for the transition to a zero waste and circular economy, as well as achieving the SDGs.
“I strongly believe that the green bond programme will open the doors of deep sustainable funds for infrastructure and social development for Lagos, being the biggest player in the sub-national capital market, and therefore open new doors overall for lots of others.
“As a state, we embrace the transparency and commitment that comes with a Green Finance framework. We believe it sends an important signal to investors in the market about who we are – a state that is fiscally responsible, prudent and disciplined. This has indeed been re-affirmed by our ratings upgrade by Fitch Ratings, an Internationally renowned rating agency, from AA+ (nga) to AAA(nga) for ‘good standing in terms of its debt sustainability and resilience’, which happened just yesterday.’’
Bola Onadele-Koko, CEO of FMDQ Group said the firm was proud to partner the state towards addressing climate and environmental challenges through the bond.
“I welcome you to this historic signing of MoU between the Nigerian Green Bond Market Development Programme Implementing Partners (FMDQ Group and Financial Sector Deepening Africa) and the Lagos State government, to facilitate the issuance of the proposed maiden N25.00 billion Lagos State Government Green Bond issuance.’’
“This will stimulate economic growth, enhance job creation, and align the state’s THEMES agenda towards transitioning Lagos State to a greener and more sustainable economy in line with the United Nations Sustainable Development Goals,” he said.