As Nigeria plans to inaugurate its Sovereign Green Bond to address climate change and environmental sustainability, the country’s Minister of Power, Works and Housing, Mr Babatunde Fashola, SAN recently outlined the benefits that could be derived from the investment vehicle. Some of the rewards he pointed out included a new economy and help for the government to source funds to implement its budget, especially in infrastructure development.
Fielding questions from the press after the Green Bonds Capital Market & Investors Conference organised by the Federal Ministry of Environment and the Debt Management Office (DMO) in Lagos, Fashola said the fund would be directed towards fighting climate change, enabling the Nigerian government to realise its renewable energy projections.
Fashola explained that Nigeria was working towards achieving 30 per cent in renewable energy by 2030, and also disclosed that the Solar Unit Distribution Programme (SUDIP) project was estimated to cost N1.3 billion. He also added that the solar project would provide up to 12MWs of power, creating 6 000 jobs and impacting at least 60 000 persons.
The Minister noted that one of the challenges that has stalled development in the country over the years was the lack of sufficient infrastructure spend. He then advised that going forward the Green Bond would help government to source funding to implement its budget.
“So, that is how it affects us; it is a source of funding for budget”, he said.
“As you heard from the Acting President and the Hon. Minister of the Environment, the first launch of this Bond is only looking to a size of about N20Billion to test the market; those are going to go ostensibly into some smaller spend size because there are so many things to do,” the Minister explained further.
Assuring that the proposal to achieve 30 per cent renewable energy by 2030 was realistic, Fashola declared, “It is extremely realistic; it is based on very extensive consultations, it is based on our current realities, it is based on what we expect is realistically achievable”.
In his contribution at the conference during the ministers’ dialogue with the theme, “Ensuring Sustainability of Green Bonds”, Fashola advocated for the concept of the Sovereign Green Bond and its components of Climate Change to be taken to the street level. He argued that this would enable Nigerians understand and connect with it and that would also make implementation of the environmental projects easy among the ordinary people.
Meanwhile the Acting President, Professor Yemi Osinbajo SAN, in his address, described the Green Bond initiative as a new addition to the market funding portfolio, stating that the proceeds would be used to fight climate change.
“Climate change has led to more natural disasters, thereby impacting negatively on food, water and energy supply,” the Acting President said.
Osinbajo said the Green Bonds would also provide an opportunity to deepen the capital market as well as tackle poverty. He also pointed out that the bond issuance would also support the Federal Government’s shift to non-oil based assets for project financing for economic growth and development.
Mrs Amina Mohammed, Minister of Environment who also attended the conference said the project was in line with the Nigerian Federal Government’s sustainable development drive started in September 2016. She added that the Nigerian government, under its recovery growth plan, identified Green Bonds as a vehicle that could be used to drive the country’s economy in terms of environmental projects funding.
Mohammed said the bonds, if properly harnessed, would create new jobs, open new investment avenues for the Nigeria as well as ensure creative thinking. She also added that the proceeds would be invested in critical social-economic and environmental sectors that would impact on the lives of common Nigerians. She called on domestic investors to rally around the Green Bonds issuance to ensure its success in order to support government’s diversification agenda.
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