The Nigerian Stock Exchange (NSE) has released draft guidelines for the listing of green bonds. A green bond is one issued to finance or re-finance in part or in full new and existing eligible environmental or climate project.
Here are highlights of the guidelines:
- The issuer shall clearly state that the bond is a green bond.
- The Issuer shall comply with these Rules, the Securities and Exchange Commission’s regulations, and The Exchange’s requirements for listing and issuance of bonds.
- The Issuer shall demonstrate that the proposed Green Bond shall comply with the green bond principles.
- The Issuer shall open an escrow account specifically for the net proceeds of the issue; and shall prudently manage the proceeds from the offer in order to ensure strict allocation to identified proposed projects.
- Issuers shall make and keep readily available, up to date information on the use of proceeds on an annual basis until full allocation of the proceeds, which shall be presented in an annual report to bondholders.
- The annual report shall be published in at least one national daily newspaper, and the issuer shall ensure that the information is published on and remains on its website throughout the tenor of the Green Bond.
- The Issuer shall appoint an independent external reviewer to issue annual, and follow up assessment reports to confirm the alignment of the Green Bond issue with the key features of the green bond principles.
- Upon finding that the Issuer has failed to comply with these Rules, the NSE shall declare in a release to the public that such Issuer’s Green Bond listing is no longer in compliance with the Rules of The Exchange, and that investors are to trade with caution on the bonds in light of the absence of up to date information, among other actions.