NGX, IFC Give Step-by-Step Process for Green Bonds Issuance

March 17, 2022
green bonds

By Dipo Olowookere

Green bonds issuance is still relatively new in the Nigerian capital market and the Nigerian Exchange (NGX) Limited is making efforts to attract more investments to the ecosystem.

A green bond is a debt instrument issued by the government or a corporate organisation to raise funds for projects that are friendly to the environment.

On March 10 and 11, 2022, the NGX partnered with the International Finance Corporation (IFC), a member of the World Bank Group, to train issuers and market operators on the issuance of sustainable financial instruments.

The event themed Deep Dive in Green, Social and Sustainability Bonds Issuance was sponsored by the Kingdom of Netherlands and HSBC and was the second in a series of engagements aimed at further socialising sustainable financial products, particularly green bonds in Nigeria.

It was also a continuation of the collaboration between NGX and IFC on the promotion of sustainable finance across the Nigerian capital market under IFC’s REGIO Technical Assistance Program for Africa and builds on a similar training hosted in December 2021.

At the programme, participants got to know the best practices in sustainable finance issuance and also the unique characteristics of green social and sustainable bonds, the specific advantages of each instrument, as well as the detailed step-by-step process for issuing these instruments.

With a specific focus on green bonds, participants at the training were presented with an overview of the actors involved in the green bond issuance process, their roles, and responsibilities.

The training attendees equally had the opportunity to better understand different green bond labelling schemes, including CBI standard, as well as other important instruments and tools contributing to the CBI certification process such as CBI’s taxonomy and other classification systems.

Speaking at the training, Mr Temi Popoola, Chief Executive Officer of NGX, said, “The exchange is committed to fostering the growth of sustainable financial products that integrate the financial risks and opportunities associated with climate change and other environmental challenges.

“In recognition of the climate finance needs particularly in Nigeria and the urgent action required to combat climate change as enshrined in the Paris Agreement on Climate Change, the Nigerian Exchange Limited, in 2016, championed efforts along with government and industry stakeholders that culminated in the issuance of the maiden N10.69 billion (c. $25.8 million) 13.48 per cent 5-year green bond in 2017.

“We are pleased to continue our collaboration with Nigerian exchange globally recognised institutions such as IFC and CBI to share valuable experiences and best practices on green finance, and promote the development of sustainable finance market across our ecosystem.”

Also speaking at the event, Ms Denise Odaro, Global Head, Investor Relations, IFC, said “Green bonds are an integral part of advancing sustainability as they facilitate sustainable investments and innovative financing.

“IFC, as a partner in developing the issuing of green bonds, played a critical role when it launched a Green Bond Program in 2010 to help catalyse the market and unlock investment for private sector projects that support renewable energy and energy efficiency.

“Since then, IFC has issued globally 178 green bonds in over 20 currencies for over $10.5 billion. We continue to support our partners, such as the Nigerian Exchange, to provide the right knowledge, tools, and contribute to creating enabling conditions for green, social and sustainability issuances.”

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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