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Spotlight Stories

About Nigeria’s Proposed $64 Million ‘Green’ Bond

Green bonds fully explained

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Nairametrics| The recent success, as the Federal Government (FG) will like to describe it, of the February $500 million Eurobond seems to have instilled confidence in financial policy makers as news of more and more bonds have been coming through. First, it was another proposed $500 million Eurobond, now Acting President Yemi Osinbajo has announced another $64 million ‘green’ bond for April.

He stated this yesterday while addressing participants at the Green Bonds Capital Market & Investors Conference organized by the Federal Ministry of the Environment and the Debt Management Office (DMO) at the Nigerian Stock Exchange (NSE) in Lagos.

All About The Green Bond Conference

The Federal government through the Federal Ministry of Environment, Debt Management Office and Ministry of Environment today held a Green Bond conference at the Nigerian Stock Exchange (NSE). Present at the occasion were outgoing Minister of Environment Amina J Mohammed, Minister of Power, Works and Housing Babatunde Fashola and the Director General of the Debt Management Office (DMO) Abraham Nwankwo.

Acting President, Professor Yemi Osinbajo also gave opening remarks and was present through the first panel discussion.

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  1. The Green bond is part of the federal government’s Economic Recovery and Growth Plan (ERGP).
  2. The ERGP has a target of creating 15 million jobs by 2020. Projects funded by the bond are expected to create 10% of that target.
  3. Nigeria will be the first emerging market in sub Saharan Africa to have a green bond.
  4. Projects to be funded by the green bond will be taken from the 2017 budget.
  5. The intended amount to be raised from the green bond is 20 billion naira.

The first panel discussion comprised the Ministers for Environment Power Works and Housing, as well as Federal Capital Territory (FCT). They highlighted the various projects that could be funded using green bonds. Namely: mass transit scheme, solar street lights, and a railway system that has the option of running with electricity.

At the second panel discussion, representatives of key regulators namely the Securities and Exchange Commission (SEC) and the Debt Management Office (DMO) gave a broad description of the regulatory framework currently being put in place for green bond issuance.

The last panel discussion comprised potential investors from the International Finance Corporation (IFC), Nigerian Sovereign Investment Authority (NSIA) and the pension industry who stated their willingness to invest in the upcoming green bond.

The outgoing minister of environment, also gave a firm assurance that the green bond programme would continue after her exit to the United nations, this was also echoed by the Minister of State for Environment.

According to reports from Moodys, over $200 billion worth of green bonds have been issued in the past ten years. China has been a key player in the green bond market, with over $36 billion dollars green bond issuances so far. Estimates of potential green bond projects are currently over $700 billion dollars.

What though is a green bond? Simply put, a green bond is just like any other bond Nigeria has issued but with a specific target- the money obtained from the bond is channeled into funding projects that are environmentally friendly or ‘green’, hence the name given to the bond. These ‘green’ projects include renewable energy, clean transportation and sustainable water management.

The benefits of a green bond to the issuer, in addition to accessing more funds, include an enhanced global reputation and commitment to sustainable development. In addition, for mono-economies like Nigeria, green bonds offer a means of channeling funds into other sectors that can drive the nation’s economy.

It is no wonder then, that Osinbajo harped on the boost the Federal Government’s diversification strategy to non-oil sectors would receive from the bond as well as the added benefits of eradicating poverty caused by natural disasters from climate change and deepening the nation’s capital market.

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Chacha Wabara-Ogbobine is a Legal practitioner with over 9years post call experience. A research Consultant, professional writer and a blogger at heart,owner of four thriving websites with well over 10years of experience.Totally in love with keeping fit and coaching weight loss enthusiasts. I love my quiet time, being with my kids, watching TV series for hours on end.

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Financial Services

Union Bank Nigeria Plc issues disclaimer against purported sale of owner’s stake

Union Bank has rejected claims that its majority shareholder, Atlas Mara is considering selling its 50% stake.

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Union Bank's statement

The Union Bank of Nigeria Plc has today issued a disclaimer against an unsubstantiated publication by one of Nigeria’s leading online news site, that its principal owner is considering selling its 50% stake in the firm.

The disclaimer was signed by the bank’s secretary, Somuyiwa Sonubi and sent to the Nigerian Stock Exchange, as seen by Nairametrics.

Recall that a few days ago, some online news website had reported that Union Bank’s principal owner, Atlas Mara is considering selling its stake in the firm, after receiving bids from local banks. The report has it that Atlas Mara engaged the services of a financial advisor, Rothschild & Co to consider the deal.

In a bid to shed more light on the issue and allay the fears of stakeholders, Union Bank dismissed the claims, describing it as a mere ‘rumour and speculation’. It went further to advise relevant stakeholders which comprises of the members of the public, its customers, NSE and other regulatory bodies to disregard the speculation in its entirety.

Corroborating the stand maintained by the bank, Atlas Mara also rejected the report. It clarified the issue of contracting external advisers, noting that it was in line with the Board’s decision to explore a wide range of strategic options.

Specta

An excerpt of the disclaimer issued by the firm reads: “While it is the Company’s practice to refrain from comment on market rumours or speculation, we believe it is important to note that Atlas Mara has not received any offers from any local Nigerian bank or other bank wishing to acquire the Company’s stake in Union Bank of Nigeria (“UBN”). As previously announced to the market in 2019, the Board of the Company has been exploring a wide range of strategic options with the assistance of external advisers. That process is still underway and the Company’s strategic objectives have not changed.’’

What you should know

  • Atlas Mara is currently the biggest shareholder in Union Bank of Nigeria, with a stake of 49.97% (approximately 50%).
  • Union Bank Nigeria Plc share price closed trading today, January 27, 2021 at N5.7, down by 3.39%. It also has a market capitalization of about N165.99 billion.
  • Based on the current market capitalization, the stake of Atlas Mara translates to approximately N82.9 billion.

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Spotlight Stories

Telecom stocks reach record high, Nigerian stock market value hit N22 trillion

Nigerian Stock Exchange Year-to-Date Return stood at 4.08% to print market capitalization at N21.934 trillion

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Value of shares traded by top 10 stockbrokers up 133% despite COVID-19, investors, Raging Bulls lift Brent Crude price by 10%

Nigerian bourse sustains the bulls today as the All-Share Index advanced further by 0.83% to close the day’s trading at 41,930.73 index points.

Consequently, the Nigerian Stock Exchange Year-to-Date Return stood at 4.08% to print market capitalization at N21.934 trillion.

  • Activity level was impressive as volume and value of trades increased. A total of 543 million units of shares valued at N7.321 billion exchanged hands in 6,770 deals.
  • Transnational Corporations continued to trend as the most traded stock with regards to volume with 57.2 million shares, while ZENITHBANK topped by value at N1.24 billion.
  • With 35 gainers to 21 losers, sectoral indices were mostly positive.

Top gainers

  • WAPCO up 7.27% to close at N29.5
  • JBERGER up 5.64% to close at N20.6
  • DANGSUGAR up 2.49% to close at N20.6
  • MTNN up 2.40% to close at N175
  • AIRTELAFRI up 1.09% to close at N930

Top losers

  1. SKYAVN down 10.00% to close at N2.88
  2. CAVERTON down 9.41% to close at N1.83
  3. ARDOVA down 2.44% to close at N18
  4. UBN down 3.39% to close at N5.7
  5. ETI down 2.29% to close at N6.4

Outlook

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Nigerian Stocks kept the bullish run ongoing amid significant buying pressure sighted in leading telecom stocks that include MTN Nigeria and Airtel Africa.

  • The NSE Insurance Index led the gainers’ chart with 1.54%. The Industrial, Consumer Goods, and Banking Indexes trailed by +0.52%, +0.21%, and +0.13% respectively. Conversely, the Oil & Gas indices closed as the lone loser, down by -0.12%
  • Nairametrics however, envisages cautious buying, amid improved market conditions in Nigeria’s financial market.

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Coronavirus

NASS directs Health Ministry to suspend disbursing N10bn on Covid-19 vaccine production

NASS has ordered the Ministry of Health to suspend expenditures regarding the N10 billion released for funding of Covid-19 vaccines.

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AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

The National Assembly has asked the Federal Ministry of Health to suspend further action on plans to spend the sum of N10 billion released by the Federal Ministry of Finance to fund the production of Covdi-19 vaccines.

This follows the dissatisfaction of the National Assembly Joint Committee on Health with the explanation of the Minister of Health, Osagie Ehanire, on how to utilize the N10 billion.

According to a report from Channels, this disclosure was made by the Chairman Senate Committee on Health, Ibrahim Oloriegbe, during an interaction between members of the committee and the representatives of the Federal Ministry of Health.

Ehanire was at the meeting with other representatives which includes the Minister of State for Health, Olorunnimbe Mamora; the Permanent Secretary of the Ministry, and the Director-General of the National Primary Healthcare Development Agency Faisal Shuaib.

What the Chairman National Assembly Joint Committee on Health is saying

Oloriegebe said the committee is dissatisfied with the explanation of the Minister and has directed that the money should not be spent until the Ministry can state clearly, what the money will be used for.

Specta

He said, “This N10billion is just given to you, with due respect, with what you have given to us, you don’t have a specific detailed plan for it. Our decision, for now, is that you can’t spend it (the money) until you provide us with a satisfactory answer. Once you provide us with the details then we will invite all the necessary persons.’’

What you should know

  • It can be recalled that the Minister of Health, Osagie Ehanire, a few days, during one of the briefings of the Presidential Task Force on Covid-19 revealed that the sum of N10 billion had been released for the local production of Covid-19 vaccine.
  • He said the money was part of an agreement between the Federal Government and a foreign partner, May and Baker plc for the production of bio vaccines and added that the health ministry is acting on a Memorandum of Understanding (MoU) between the Federal Government and the foreign partner for the production of the bio vaccines.
  • Director-General of the Budget Office, Mr. Ben Akabueze, representing the Finance Minister during a meeting with the Joint Committee said that the N10 billion it released for vaccine development is not only for the production of Covid-19 vaccines.

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