DMO to List Green Bond for Easy Trading and Liquidity

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MARKET NEWS

Investors staking their funds in the Federal Government maiden N10.69 billion Green Bond have been assured of liquidity as the Debt Management Office (DMO) said the bond would be listed on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange. Green Bonds are debt instruments tied to environmental projects to address climate change. The first tranche of the green bond will open for subscription today and close on December 22.

Speaking at an investors’ forum in Lagos last Friday, the Director General of DMO, Ms. Patience Oniha said the issue would be listed on both platforms in January after the  completion of the first tranche.

According to Oniha, government was working through the Federal Ministry of Environment and other stakeholders  to introduce green bond to support the private sector who may also want to issue the product to support financial inclusion.

She said that DMO was not only to borrow but also supports the development of the market. She said that the bond issuance benefits were huge which ranges from poverty alleviation, job creations, economic benefits and environmental benefits.

The DMO boss said that green bond could be issued by corporates and not only government, noting   that capital market regulators were open to new products and would be eager to issue separate guidelines that would allow corporates to issue green bond.

Oniha said that the issuance of the Green Bond was the result of the endorsement of the Paris Agreement on Climate Change on Sept. 21, 2016, by the Nigerian government.

The proceeds of the green bond, according to her,  will be used to finance projects in this year’s budget that had been certified as green because of their positive effects on the environment.

She said that the projects to be financed with the proceeds of the green bond issuance include the renewable energy micro utilities and afforestation programmes of the government.

Meanwhile, Deputy Director, Department of Climate Change, Hajia Halima Bwari,  said that the bond became necessary to tackle climate change being experienced in Nigeria and the world

Bwari said that the climate change if not tackled would become a big issue because of its effect on environment and social wellbeing.

 She said that the country’s target was to reduce emissions by 20 per cent on its own by 2030.

Mr. Muhammad Mamman-Daura of Chapel Hill Denham Advisory Limited said that the bond, the first in Nigeria and West Africa, second in emerging markets and fourth globally was a five-year tenored instrument being issued to raise funds for specific green projects across the country.