Environment Minister Hosts Inaugural Green Bond Advisory Group Meeting
The Honorable Minister of Environment in collaboration with the Minister of Finance has initiated the steps needed to issue Nigeria’s first sovereign green bond.
This is part of a strategic process to add to the nations funding options in the financing of its development objectives.
The process will also enable the country tap into the growing global market for green bonds which is estimated to have reached USD100B by the end of 2016, As part of the process to ensure that there is wide consultation on the process of periodic issuance of FG Green bonds,
The Environment Minister and her counter-part, the Minister of Finance today hosted a Public Private Advisory Group meeting on the Green Bonds.
According to the Minister of Environment, Amina Mohammed, the advisory group will provide advice and also identify likely impediments to the issuance process and provide guidance on how projects can be certified “Green”.
The Minister further stated that the group is set up to provide support to the Federal Ministry of Environment in its implementation of the Green Bond guidelines in order to maintain a process that is transparent and consistent
Both Ministers in consultation with experts and key actors have agreed a number of key requirements in the issuance of this green bond. These are; the projects should be green in nature, the project cost should form part of the Medium Term Sector Strategies (MTSS) of selected Ministries Departments and Agencies (MDAs), the project should have a defined revenue model or economic impact that generates resources that will be used to service the green bond and the emissions contributions of the projects should be calculated and documented.
A Sub-set of Inter-Ministerial Committee on Climate Change (ICCC) was tasked to identify the pipeline of projects with ‘Green Credentials” that will be funded by the Green bond. The MDAs in this sub-set are Environment (FRIN, CCD, DDA, FOR, GGW), Federal Ministry of Agriculture and Rural Development (FMARD), Ministry of the Federal Capital Territory (FCT-Transport), Federal Ministry of Water Resources (FMWR) and Federal Ministry of Works Power and Housing (FMWPH).
The Federal Ministry of Environment has developed a set of guidelines, drawing from the template model provided by the International Capital Market Association (ICMA) with technical inputs from Debt Management Office (DMO), Climate Bonds Initiative, UNEP and the World Bank In September of 2016 the Federal Ministry of Environment held a stakeholders meeting with key players in the capital markets on the plans for issuance of a green bond.
To continue the consultations the Ministry in collaboration with Ministry of Finance set up a Green Bond Private Public Advisory Group (GB-PPSAG) to continue consultations which will support the Federal Government in the process of development of a green bond program.
A high-impact stakeholders Meeting with Capital Market operators and Investors will hold in Lagos at the end of February 2017.
Participants on the Advisory Group are drawn from Investments Banks, Developments Banks, issuance house, MDAs and Capital market regulators. The issuance of Nigeria’s Sovereign Green Bonds hopes be the first in an emerging market in the world and in Africa.