Nigeria plans to launch its delayed “green” bond – the first for an emerging market country – within a few weeks, the country’s former environment minister said.
Amina Mohammed, now deputy secretary-general of the United Nations, told the Thomson Reuters Foundation proceeds from the sovereign bond – which is expected to raise about 20 billion naira ($63.6 million) from its first tranche – would be used to fund renewable energy, transport and agriculture projects.
Nigeria’s green bond could lay the groundwork for other African countries to follow suit, she added.
Green bonds have been around for a decade but sovereign borrowers had been absent from the market, which was traditionally dominated by international development banks.
The green bond market has enjoyed strong growth in the last two years, with issuance jumping 105 percent last year alone to a record $72 billion, according to data compiled by Thomson Reuters and the Climate Bond Initiative.
Poland and France have both launched sovereign green bonds since the end of last year.
Mohammed, who initiated the Nigerian bond while she was environment minister, said its issue had been postponed from an initial date at the end of March because the country’s budget had to be passed first.
“We’ve just had the budget approved, so I believe Nigeria will look, probably within the next few weeks, to doing (the bond issue),” Mohammed said on Thursday on the sidelines of a U.N. conference in Mexico on disaster risk reduction.
Announcing the plan for the bond in February, the environment ministry said it was aimed at widening Nigeria’s funding options and diversifying the OPEC member’s oil-dependent economy, which is the largest in Africa.
Peter Tarfa, director of the climate change department in the environment ministry, told a separate conference in Barcelona this week that the bond would be launched in the coming month, and would generate resources for climate change projects, including forest-planting and a mass rapid transit system.
The total amount raised, including a second tranche targeted for September, would be more than 45 billion naira, he said.
The green bonds “have the potential to deliver the low-carbon, climate-resilient infrastructure needed in Nigeria… with access to private capital at scale”, he said.