By Giwa SHILE
Capital market operators have expressed optimisim that the listing of the Federal Government N10.69 billion Sovereign Green Bond on the Nigerian Stock Exchange (NSE) would place the country as the leading investment destination in Africa.
The capital market operators expressed the hope while reacting to the implications of the Green Bond listing on NSE slated on Wednesday in Lagos.
TBI Africa reports that Green Bonds are fixed income, 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.
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd, said the bond’s listing would enrich the nation’s bourse in terms of product diversity and market capitalisation.
Kurfi said Green Bond presents countries with an opportunity to demonstrate national leadership in the green financing agenda.
He added that it would open new investors’ base and strengthen the country’s commitment to complying with the Paris Climate Change Agreement.
Kurfi, who commended NSE for the initiative, said that it would help in moderating climate change by investing in solar plants, hydro power and agriculture against the backdrop that 90 per cent of Nigeria’s export income comes from crude oil.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Limited, said the major drawback of the initiative was lack of international standardisation of what constitutes a Green Bond.
Omordion said there was the need for strong monitoring mechanism worldwide to ensure compliance to the bond’s framework.
“There is no worldwide monitoring mechanism to ensure compliance with the parameters set by frameworks such as the Green Bonds Principles or Climate Bonds Standards.
“There is therefore, need to develop community of local verifiers that will assess whether issuers’ Green Bond meets the requirement of the Climate Bonds Standard,” he said.
Omordion said implementation of tax incentives by the Federal Government would encourage new issuers to float Green Bonds.
“To further develop the market and enhance the growth of green finance, market operators have called on the government to implement tax incentives to issuers.
“Grant Schemes should also be instituted to address some of the costs of issuing bonds for corporates, including independent reviews and project assessment and evaluation,” he said.
According to him, capital markets have a key role to play in mobilising finance to support the Paris Climate commitments and Green Bonds are among the financing options available to private firms and public entities keen on backing climate and environmental investments.
TBI Africa reports that the Federal Government had in February 2016, met investors and capital markets operators in Lagos for the first ever Green Bonds Conference with the theme, “Green Bonds: Investing in Nigeria’s Sustainable Development”.
The Conference, headlined by Vice-President, Prof. Yemi Osinbajo was organised by the Federal Ministry Environment in collaboration with Federal Ministry of Finance and Debt Management Office at The Nigerian Stock Exchange.
The conference was a major step towards the issuance of Nigeria’s first sovereign Green Bond.
The aftermath of the conference was the floating of the country’s sovereign Green Bond which was largely over-subscribed.
TBI Africa reports that Nigeria is the first nation to issue a Climate Bonds Certified Sovereign Green Bond, the first African nation to issue a sovereign Green Bond and the fourth nation in the world to issue after Poland, France and Fiji.
