Investors Stake N33bn on Nigeria’s N15bn Green Bonds

By Modupe Gbadeyanka

The second Sovereign Green Bond offering for N15 billion auctioned last week by the Nigerian government via the Debt Management Office (DMO) has recorded another success.

During the exercise, the debt office offered N15 billion worth of the environment-friendly papers, but subscriptions valued at N32.93 billion, representing 220 percent, were received from interested investors.

Business Post reports that the offer opened to the general public on Monday, June 3, 2019 and closed on Monday, June 10, 2019.

The exercise was preceded by road show meetings with investors and other stakeholders in Lagos and Abuja.

It was gathered that the number of subscribers doubled when compared with the figure for the first Sovereign Green Bond issued in December 2017.

Retail investors were not left out, as the number of individuals who subscribed for the second Sovereign Green Bond more than doubled.

The amount of subscriptions grew by almost 201 percent with the share of total subscriptions rising to 1.43 percent compared to 0.67 percent for the 2017 Sovereign Green Bond.

The  stronger  participation  of  retail  investors  shows  that  financial  inclusion  and deepening of the domestic financial market, which are some of the key objectives of the DMO in its issuance activities, are being achieved.

Whilst the offer was oversubscribed, the DMO allotted only the N15 billion that was offered for a tenor of 7 years, at a coupon of 14.50 percent per annum.

The DMO said the subscriptions demonstrated a greater level of commitment from the general public towards protecting the environment.

Proceeds of the Green Bond will be used to finance projects in the 2018 Appropriation Act, which will contribute to Nigeria’s commitments to the Paris Agreement on Climate Change.

The projects include off-grid solar and wind farm, irrigation, afforestation and reforestation, as well as, ecological restoration.

Assisting the DMO with this landmark offering were the financial advisors, Chapel Hill Denham Advisory Limited, Capital Assets Limited, Rand Merchant Bank Nigeria Limited and Stanbic IBTC Capital Limited.