DMO Plans Another Green Bond Issuance this Year

By June 9, 2018 Investment News
The Debt Management Office (DMO) on Wednesday, 6th June, said it plans to issue another green bond in the later part of the year as part of its initiative in improving the sustainability of the environment.

Dele Afolabi, Director, Portfolio Management at DMO who disclosed this in a statement, said the issuance will be higher than the previous amount raised in December last year.

“We plan another issuance this year on a higher volume so that we can have more liquid and lots more investors to participant” Afolabi said at a panel discussion of the corporate green bond programme launch in lagos.

If this plan falls through, it will be the second time that Africa largest economy is raising funds through the green bond issuance

In December 2017, the federal government through the DMO raised as much as N10.69bn ($29m), making Africa’s biggest oil producer to become the first on the continent and fourth in the world after Poland, France and Fiji to issue a security that raises funds for environmental projects.

The fully subscribe bond was a five year tenor were investors recieve a 13.48 percent annual coupon.

Afolabi said that the major subscribers to the bond were majorly Public Fund Administrators (PFA’s), contributing 75 percent of the investment in the green bond while the remaining was shared among banks with no foreign investor buying into the bond.

He however, encouraged banks to actively participate in the green bond issuance this year as they expect to see a form of corporation rather than the competition that was seen in the last issuance as a more aggressive road show will be done to create more awareness.

He noted also that while the 2017 green bond issuance was focused on two sector (power and Afforestation), this year’s issuance will be channelled to about seven sectors.

While the DMO did not disclose the amount that will be issued this year, a technical assistant to the Nigerian Minister environment Ahmad Salihijo, had earlier disclosed that the federal government has planned to issue an additional N150 billion in green bonds to finance climate related work for women and non-state actors in Nigeria in line with its aim to see a 40 percent reduction in CO2 emission by 2030.

Source: BusinessDay