The federal government may issue the first tranche of green bonds next month. UN Deputy Secretary-General and former Minister of Environment Amina Mohammed stated this at a UN conference in Mexico. Here is a summary of what we know about the bonds:
- The bonds may be launched in a few weeks.
- The launching was put on hold due to the budget not being passed.
- The green bonds will be the first in sub-Saharan Africa.
- The first bond is expected to raise N20 billion.
- The second tranche of the bonds may be issued in September.
A green bond is a fixed income instrument for the purpose of raising debt capital. In addition, it specifies that proceeds of the bond will be used for ‘green’ or environmentally friendly purposes. The first green bond was issued by the European Investment Bank (EIB) in 2007 and it raised $400 million. The Climate Bond Initiative in 2009 issued the green bond principles which have been adopted as a benchmark for the definition of green projects. Globally, over $31 billion worth of green bonds have been issued since 2007.
Nairametrics had written about the green bond project earlier in the year. A crash in crude oil prices, has led to a massive fall in government revenue. Government has thus had to ramp up borrowing to finance critical projects.