By Dipo Olowookere
A Memorandum of Understanding (MoU) to promote the cross listing and trading of green bonds in Nigeria and Luxembourg has been signed by the Nigerian Stock Exchange (NSE) and the Luxembourg Stock Exchange (LuxSE).
It was gathered that the deal was signed by the NSE CEO, Mr Oscar Onyema and LuxSE CEO, Mr Robert Scharfe, during the annual meeting of the World Federation of Exchanges in Singapore on Wednesday, October 9, 2019.
The Nigerian green bond market received international recognition following the issuance and listing on the NSE of the N10.69 billion federal government sovereign green bond in December 2017.
This issuance sparked significant interest from the international and local capital market communities as it opened new investment opportunities, especially for domestic investors, to increase their exposure to financial instruments that generate social and environmental impact.
The Luxembourg Stock Exchange operates the Luxembourg Green Exchange (LGX), a platform exclusively dedicated to sustainable finance instruments.
LGX now holds a 50 percent global market share of listed green, social and sustainability bonds. LuxSE works closely with selected stock exchanges around the world to support the growth of sustainable finance.
With these in place, both exchanges have agreed to collaborate with a view to sharing best practises and organising joint initiatives in their respective markets.
Speaking on the development, Mr Onyema said, “This collaboration reinforces NSE’s drive to foster the growth of sustainable finance in Nigeria, a journey that commenced with the launch of the first Sovereign Green Bond by NSE, in partnership with the Federal Ministry of Environment, Federal Ministry of Finance and the Debt Management Office.
“With the MoU, issuers will enjoy the benefit of increased visibility through the cross listing of their securities in Nigeria and Luxembourg.
“The partnership will further facilitate the growth of the Green Finance industry in Nigeria and ultimately deepen the Nigerian capital market through the mobilisation of the foreign green capital needed to fund sustainable projects in Nigeria.”
Also commenting, Mr Scharfe said, “Sustainable finance is becoming a truly global movement. By joining forces with other exchanges to promote and facilitate green finance, we strive to accelerate the sustainable finance agenda and increase awareness of and interest in investment projects that support the sustainable development that our world needs.”
“We are pleased to cooperate with the Nigerian Stock Exchange to further strengthen sustainable finance in and between our markets,” he added.
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