The Nation Newspaper

Tag: Green bonds

  • DMO: Sukuk, green bonds’ll promote financial inclusion

    The Debt Management Office (DMO) yesterday said the issuance of Sukuk and green bonds, also known as ethical investments, by the Federal Government will promote financial inclusion and increase investment in ethical financial products.

    Speaking at a business rountable in Abuja, its Director-General, Ms. Patience Oniha said based on the experience garnered from issuing oversubscribed Sukuk bonds in recent times, government was favourably disposed to invest in ethical products to swell its investment products base.

    “The experience from the issuance of Sukuk bonds has been beneficial to the government. The Sukuk is one of the landmark achievement not only in terms of fund but the projects being implemented. We will like to do more with Sukuk because it’s transparent but the major issue for us now is to increase the investor base for ethical products,” Oniha said.

    Another speaker at the roundtable and Managing Director of Sigma Pensions, Mr. Dave Uduanu called for the broadening of ethical investments in the country to help government achieve its financial inclusion drive.

    Uduanu said:  “While there have been increasing penetration of financial solutions, the ethical investment space had yet to be fully developed. Despite the under developed nature of ethical investments, there are significant opportunities for growth and innovations in that segment of the economy.”

    He highlighted some of the opportunities and benefits of ethical investment to include: “vibrant ethical financial system will help crowd in a new class of institutional and retail investors into the Nigerian financial system which will help deepen the breadth and sophistication of the fund management industry.

    Read also: Finance, DMO approve N195bn to exporters for EEG settlement

    “A key tenet of robust financial markets is the existence of many players on both demand and supply having diverse opinions, desires and needs which allow for a more efficient price setting mechanism.

    “It will help drive greater financial inclusion and pension enrollment. Nigeria’s financial exclusion rate at the end of 2018 was estimated at 37 per cent with large exclusion observed in the northern regions.

    “Among other reasons, the reluctance towards the formal financial sector in the north likely reflects unease with conventional products.

    “With the option of retirement savings products suited to ethical preferences, it is easy to see a ready outlet for raising financial inclusion.”

    Holding the roundtable discussion he said has become necessary “to provide a platform to attract fresh investors and drive increased market participation by investors looking to maintain their values and principles while building their portfolios.”

     

  • Nigeria launches regulatory framework for green bonds

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has unveiled a regulatory framework for issuance of green bonds in Nigeria, providing the much-needed guidelines for the development of the new market.

    SEC has issued a circular on the incorporation of new rules and regulations on green bond into the rules and regulations at the Nigerian capital market.

    The green bond regulatory framework defined a green bond as any type of debt instrument, the proceeds of which will be exclusively applied to finance or re-finance in part or in full new and or existing projects that have positive environmental impact.

    The rules indicated that green bonds would be used exclusively to finance renewable and sustainable energy, clean transportation, sustainable water management, climate change adaptation, energy efficiency, sustainable waste management, sustainable land use, bio-diversity conservation and any other categories as may be approved by SEC from time to time.

    The regulations highlighted some special conditions that any issuer of green bond must fulfill in addition to the general registration requirements for debt issuances as stated in the Rules and Regulations of the Commission for states, local governments, corporate and supranational agencies.

    According to the rules, an issuer of a green bond shall also file a feasibility study and report, stating clearly the measurable benefits of the proposed green project or assets such as green house gas reduction, reduction of water use and reduction of harmful emissions.

    The issuer must also file a prospectus, which shall include project categories, project selection criteria, decision-making procedures, environmental benefits, use and management of the proceeds as well as a letter from the issuer committing to invest proceeds of the bond in green projects or assets.

    The issuer must also provide an independent assessment or certification issued by a professional certification authority or person approved or recognised by the Commission in addition to any other documents that may be required by the Commission.

    “The net proceeds shall only be utilised for the purpose stated in the approved offer documents and shall be tracked as stated in the approved internal policy of the Issuer which shall be disclosed in the offer documents,” the rules stated.

    The parties to the issue are expected to create an escrow account meant specifically for the net proceeds of the offer while the proceeds shall be domiciled with the custodian. While the trustees shall ensure that the proceeds are used for the purpose stated in the prospectus, the issuer and the trustees shall be the signatories to the escrow account.

    “The issuer shall invest proceeds in green projects within the given time frame prescribed in the prospectus. Unallocated proceeds shall be invested in money market instruments with investment grade rating and this shall be disclosed in the offer documents,” according to the rules.

    According to the rules, where the issuer proposes to utilise a proportion of the issue proceeds of the issue of green bonds, towards refinancing of existing green assets, the issuer shall clearly provide in the offer document the details of the portfolio, assets and projects which are identified for such refinancing.

     

     

  • Nigeria to regulate issuance of green bonds

    Nigeria to regulate issuance of green bonds

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has started the process to introduce a comprehensive regulatory framework for the issuance of green bonds in the country.

    A green bond is any type of debt instrument, the proceeds of which would be exclusively applied to finance or re-finance in part or in full new and or existing projects that have positive environmental impact.

    A draft of the regulation obtained by The Nation indicated that green bonds would be used exclusively to finance renewable and sustainable energy, clean transportation, sustainable water management, climate change adaptation, energy efficiency, sustainable waste management, sustainable land use, biodiversity conservation and any other categories as may be approved by SEC from time to time.

    The draft, which is currently undergoing exposure to stakeholders for their review and comments, stated that any issuer of a green bond must fulfill some special conditions in addition to the general registration requirements for debt issuances as stated in the Rules and Regulations of the Commission for States, Local Governments, Corporate and Supranational agencies.

    According to the rules, an issuer of a green bond shall also file a feasibility study and report stating clearly, the measurable benefits of the proposed green project or assets such as green house gas reduction, reduction of water use and reduction of harmful emissions.

    The issuer must also file a prospectus which shall include project categories, project selection criteria, decision-making procedures, environmental benefits, use and management of the proceeds as well as a letter from the issuer committing to invest proceeds of the bond in green projects or assets.

    The issuer must also provide an independent assessment or certification issued by a professional certification authority or person approved or recognised by the commission in addition to any other documents that may be required by the commission.

    “The net proceeds shall only be utilised for the purpose stated in the approved offer documents and shall be tracked as stated in the approved internal policy of the Issuer which shall be disclosed in the offer documents,” the rules stated.

    The parties to the issue are expected to create an escrow account meant specifically for the net proceeds of the offer while the proceeds shall be domiciled with the custodian. While the trustees shall ensure that the proceeds are used for the purpose stated in the prospectus, the issuer and the trustees shall be the signatories to the escrow account.

    “The issuer shall invest proceeds in green projects within the given timeframe prescribed in the prospectus. Unallocated proceeds shall be invested in money market instruments with investment grade rating and this shall be disclosed in the offer documents,” according to the rules.

    According to the rules, where the issuer proposes to utilise a proportion of the issue proceeds of the issue of green bonds, towards refinancing of existing green assets, the issuer shall clearly provide in the offer document the details of the portfolio, assets and projects which are identified for such refinancing.

    The issuer is also expected to publish the utilisation of proceeds in at least two national dailies on an annual basis which shall contain the details of the key factors capturing the environmental impact of such investments and the same shall be disclosed in its annual report and website

    Besides, the issuer shall publish an assessment report issued by an independent professional assessment or certification agency on its website or other media and conduct and report annual follow-up assessments of the green projects and associated environmental benefits throughout the tenor of the bond.

    Nigeria is planning to float Africa’s first sovereign green bond issue with a target of N20 billion to provide environment-friendly infrastructure to not less than 44 Nigerian universities and more than 1.1 million people in other different communities.

    Vice President, Professor Yemi Osinbajo, at an investors’ conference for the green bond at the Nigerian Stock Exchange (NSE), said the issuance of the green bond would open up vast opportunities for the country, the capital market and the populace.

    He said the net proceeds of the N20 billion green bond, the first to be launched by any African government, would be used to fund projects that will reduce carbon emissions and develop renewable energy.

  • Green bonds: nine varsities to get clean energy

    The Federal Government is to power nine universities with solar energy,  the Minister of State for Environment, Ibrahim Usman Jibril, has said.

    He said this was in line with government’s efforts to ensure a clean and healthy environment through the issuance of sovereign green bonds. He made the submission last week when he paid a working visit to the National Agency for Science and Engineering Infrastructure (NASENI) Solar Energy Limited (NSEL) Plant, located in Karshi, Abuja.

    Jibril described the decision to power the tertiary institutions with solar energy as a laudable development, which according to him, is in line with the nation’s Intended Nationally Determined Contributions (INDC) that aims at reducing carbon emissions in line with global best practices.

    The Minister said his visit to the solar energy plant was to identify with as well as offer the ministry’s support to the local manufacturing company in the production of solar panel. He ýstressed that renewable energy is a critical focus of the soon-to-be-launched green bond project.

    He further maintained that solar energy would encourage the use of local content which will in turn help the country to save foreign exchange as well as create employment for the teeming youths.

    The Executive Vice Chairman of NASENI Solar Energy Limited, Prof. Mohammed Haruna, noted that the plant was the first Solar PV Module/Solar Panel manufacturing company in Nigeria. He also disclosed that the plant has a 7.5 megawatts (MW) capacity and can produce all sizes and capacities of Solar PV module.

  • Green bonds: nine varsities to get clean energy

    The Federal Government is to power nine universities with solar energy,  the Minister of State for Environment, Ibrahim Usman Jibril, has said.

    He said thisis in line with government’s efforts to ensure a clean and healthy environment through the issuance of sovereign green bonds. He made the submission last week when he paid a working visit to the National Agency for Science and Engineering Infrastructure (NASENI) Solar Energy Limited (NSEL) Plant, located in Karshi, Abuja.

    Jibril described the decision to power the tertiary institutions with solar energy as a laudable development, which according to him, is in line with the nation’s Intended Nationally Determined Contributions (INDC) that aims at reducing carbon emissions in line with global best practices.

    The Minister said his visit to the solar energy plant was to identify with as well as offer the ministry’s support to the local manufacturing company in the production of solar panel. He ýstressed that renewable energy is a critical focus of the soon-to-be-launched green bond project.

    He further maintained that solar energy would encourage the use of local content which will in turn help the country to save foreign exchange as well as create employment for the teeming youths.

    The Executive Vice Chairman of NASENI Solar Energy Limited, Prof. Mohammed Haruna, noted that the plant was the first Solar PV Module/Solar Panel manufacturing company in Nigeria. He also disclosed that the plant has a 7.5 megawatts (MW) capacity and can produce all sizes and capacities of Solar PV module.