FMDQ Admits Pioneer FGN Green Bond

—Supports Sustainable Development and Climate Change Solutions

July 20, 2018/FMDQ

Globally, countries are resorting to mobilising funds from the debt capital markets (DCM) to finance environmentally friendly projects to support development for the good of their citizenry. The Federal Government of Nigeria (FGN), through the Ministry of Finance (MoF), Ministry of Environment (MoE) and the Debt Management Office (DMO), has taken a cue from other countries, by listing the first green bond in the Nigerian DCM – the Federal Government of Nigeria ₦10.69 billion Series 1 5-Year 13.48% Fixed Rate Bonds due 2022 – on FMDQ OTC Securities Exchange (FMDQ or the OTC Exchange).

The proceeds from the issuance will be used to provide access to electricity for 45 communities across the country, develop off-grid Independent Power Plants (IPP) for universities and create afforestation programs that aim to increase forest coverage through the plantation of seedlings to cover 131,000 hectares of land. This is yet another commendable feat for the FGN, with the MoF, MoE and DMO, in their respective roles, addressing environmental challenges as well as championing development in the Nigerian DCM.

To commemorate these remarkable achievements, the OTC Exchange hosted the FGN, represented by the Director-General of the DMO, Ms. Patience Oniha, along with other key representatives from the DMO to an impressive and memorable Ceremony. Also present at the Ceremony were the Honourable Minister of State for Environment, Mallam Ibrahim Usman Jibril, the sponsor of the issue and Registration Member (Listings) of FMDQ, Chapel Hill Denham Advisory Limited, represented by its Managing Director, Investment Banking, Mrs. Kemi Awodein, along with key representatives from Chapel Hill Denham Advisory Limited, and other parties to the issue.

Ms. Tumi Sekoni, Associate Executive Director, FMDQ, whilst welcoming the guests gathered to commemorate this milestone, congratulated the issuer for the successful issue of the debut ₦10.69 billon 5Year Green bond in the DCM. She highlighted that the Bond would help address the nation’s infrastructure gap and environmental challenges in a sustainable manner to deliver prosperity for Nigerians and further deepen the domestic DCM by increasing the range of investible debt securities in the markets, invariably contributing to Nigeria’s development. She further reiterated the OTC Exchange’s commitment to continue to support the initiatives of the DMO towards the development of a highly liquid, deep and well-developed DCM in Nigeria.

Ms. Patience Oniha, Director-General of the DMO, during the issuer’s special address, stated, “the issuance of the nation’s first sovereign green bond further demonstrates Nigeria’s commitment to the protection of the environment. Nigeria endorsed the Paris Agreement on Climate Change on September 21, 2016 and undertook to achieving the Nationally Determined Contributions (NDCs), aimed at reducing carbon emissions by 20% unconditionally and 45%, with international support, by 2030. These projects require funding and the issuance of the green bond, the proceeds from which are dedicated to financing environmental projects, signals the Government’s commitment to funding the NDCs.

The Debt Management Office worked with the Federal Ministry of Environment and other stakeholders to develop guidelines and operational procedures for the green bond and the issuance of the debut green bond. The FGN has led this issuance, adhering to globally accepted standards and requirements, setting a precedence for other categories of issuers such as sub-national governments and corporates to issue green bonds. Further to the listing of this instrument, the DMO expects that trading will not only bring about climate change awareness but will also diversify the Nigerian capital markets and attract more investors”.

In his Special Address, the Honourable Minister of State for Environment, Mallam Ibrahim Usman Jibril, commented, “the listing of the FGN green bond enables the Federal Government deliver on program fortyseven (47) of its economic recovery and growth plan.

Delivering the Registration Member (Listings) remarks, Mrs. Kemi Awodein, highlighted, “the FGN’s issuance of a debut green bond reiterates the commitment to honoring the Paris Agreement signed in 2016. This landmark issuance also demonstrates the nation’s increasing innovation in debt capital markets and provides capital for stemming the adverse effects of climate change.

In addition, the issuance of Nigeria’s debut green bond is important as it opens up a new vista for financing low carbon infrastructure, given the significant infrastructural deficit in the country. With the Sovereign having now set a benchmark, we expect other issuers including states and corporates to begin to explore the possibilities of issuing green bonds. We congratulate the FGN, the DMO, the Federal Ministry of Environment, Transaction Advisers and the Green Bond Advisory Group on the Listing.”

Mr. Bola Onadele. Koko, Managing Director/CEO of FMDQ, in his closing remarks, applauded the Federal Government of Nigeria, through the Ministry of Finance, Ministry of Environment and Debt Management Office, for achieving this landmark, stating that this was yet another highly exemplary and indeed, positive step towards addressing some of the infrastructure and environmental challenges in the nation.

He also commended the sponsor to the issue and Registration Member (Listings) of FMDQ for their concerted efforts towards ensuring the success of the issuance. He further reiterated that through consistent collaboration with its stakeholders, FMDQ shall continue to further deepen and effectively position the Nigerian DCM for growth, in support of the realisation of a globally competitive and vibrant economy.

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