Nigeria’s federal government is set to inaugurate its sovereign green bonds initiative, by giving US$63mn before the end of Q1 2017.
This will be first sovereign issuance from an African nation, said a press release by Climate Bonds Initiative.
According to vice-president Yemi Osinbajo, the Nigerian government is making arrangements to inaugurate the green bonds. These are standard bonds with a green element as a bonus feature, created to fund projects that have a positive environmental or climate benefits. Osinbajo said that the initiative is a new addition to the market funding portfolio, and its proceeds would be used to fight climate change and for environmental projects such as renewable energy micro-utilities in three communities for an estimated US$31mn.
In addition to supporting a clean and healthy environment, the green bond initiative is the government’s strategic move to build non-oil assets for economic growth and development.
According to the vice-president, power is a major challenge in Nigeria’s universities, stating that 37 federal universities and seven teaching hospitals would benefit from the Energizing Education Programme (EEP) – this project is estimated to cost US$213mn would provide 119MW of power in 37 universities using off-grid solar technology.
According to the Oscar Onyema, CEO of the Nigerian Stock Exchange (NSE), assets managed by by signatories of Green Investment (supported by the UN) rose from US$4 trillion to US$60 trillion in 2015. Overall, the green bond market had around US$42bn riding on it in 2015 and hit US$50bn by September 2016.