Africa’s biggest economy breaks into greener pastures

Published: January 8, 2018

Nigeria has become the first sovereign in Africa to issue a green bond, and hopes are growing that other countries will dip their toe into the region’s nascent market.

Nigeria, rated B2/B/B+, printed its debut NGN10.69bn ($29.65m) 13.48% five-year bullet bond at the end of December 2017, with the trade settling on 22 December. The borrower went on an investor roadshow in Abuja and Lagos on 14 and 15 December.

The proceeds will be used to finance projects that became open to the government after it passed the Appropriation Act in summer last year, which legislates for increased afforestation, renewable energies and the use of green energy in the country’s education sector. 

“The government of Nigeria has put in place a comprehensive governance structure and framework that is aligned with the country's domestic green bond guidelines and international best practices," said Rahul Ghosh, a senior vice president at Moody’s. 

The ratings agency has assigned a green bond assessment of GB1 to the issuance. Also known as ‘excellent’, it is the top rating possible.

This will be a boon for Nigeria, which plans to be a regular face in the green bond market after creating an NGN150bn green bond programme.

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