Mr. Oscar Onyema, the group chief executive officer (GCEO) at the Nigerian Exchange has said Nigeria’s green bond market has a good yield curve.
He said this during a panel session focused on mobilizing financial capital during the Africa Investment Forum (AIF) held in Abidjan, Cote d’Ivoire from November 2 to 4, 2022.
According to Onyema, the Nigerian Exchange (NGX) Group has issued two sovereign green bonds and Access Bank has also issued a green bond to provide a war chest that is dedicated towards climate project financing.
Onyema also mentioned that North South Power Company Limited has issued a green bond, to support their energy transition programs around providing power to Nigeria.
In his statements, the NGX GCEO said the exchange has had a good yield curve and is working with several other green bond issuers for new rounds, including sovereign bonds.
Room for improvement: Onyema told attendees he thinks a lot can be done in sustainable financing space. According to him, a lot of education still needs to be carried out to teach people why it is important to invest in green bonds. He said green bonds were issued to finance climate projects and to allow private sector firms to show interest in green bonds.
Tapping into global financial flows: According to Onyema, Nigeria has partnered with the Luxembourg Stock Exchange (LuxSE) to carry out dual listings of green bonds because they are the largest green bond market in the world. Onyema said: “Globally, there is increased funding for green projects; it is not the same locally, so we are trying to plug into the global financial flows. The Access Bank green bond, for example, is listed on both exchanges.”
Opportunity for growth: While speaking on the panel, Onyema said: “If you look at the global equity market capitalization, it is worth about $122 trillion. Meanwhile, if you look at all the stock exchanges in Africa, covering 38 countries, the total equity market cap is $2 trillion. So, it’s a very small percentage of what is going on globally. However, there is significant opportunity for growth, especially due to recent structural changes and policies.
Potential for financing arrangements: According to the African Development Bank (AfDB) Group, a key stakeholder at the AIF, Oscar Onyema sees the potential for more financing arrangements inside and beyond Africa, ranging from philanthropic institutions to stock exchange investments.
North South Power Company Limited (NSPCL) is a pan-African generation company with a diverse and emerging portfolio focused on electricity generation.
As of 2019, NSPCL was responsible for 8% of Nigeria’s power generation. The company issued an N8.5 billion green bond in 2019.
The Africa Investment Forum 2022 is an innovative investment market bringing together African leaders and government heads on the one hand, and project promoters, private and public investors, capital investment companies, philanthropists, and sovereign funds on the other.