Mary Uduk, SEC Acting Director-General, Securities and Exchange Commission (SEC) said the commission would soon release rules to the capital market to strengthen Green Bonds issuance by corporate organisations, state and federal governments.
Uduk disclosed this on Wednesday in Lagos at the Nigerian Green Bond Market Development Programme organised by FMDQ OTC Securities Exchange.
Green Bonds are fixed income, liquid financial instruments used to raise funds dedicated to climate mitigation, adaption and other environment-friendly projects.
They provide investors with an attractive investment proposition and an opportunity to support environmentally and socially sound project.
“We are in the process of approving the rules and any moment from now it will be released to the market,” she said.
Uduk said the rules were gathered from inputs by stakeholders and participants in the market.
She added that the commission would come up with a framework that would guide the market to deepen Green Bonds issuance in Nigeria.
“You cannot do anything without structures in place. SEC is trying to put up necessary structures that will guide the market when the time comes,” Uduk said.
She said Green Bonds would deepen the nation’s capital market, noting that the new product provided enormous opportunities that would turnaround the environment.
According to her, the Federal Government has set a benchmark for issuance of Green Bonds following successful outing in 2017, unlike Sukuk that was pioneered by a state government.
Uduk said SEC was working with Climate Bonds Initiative, an international organisation with the largest capital base of 100 trillion dollars, for climate change solutions to strengthen internal capacity.
“We don’t want a situation where corporate organisaions will want to raise Green Bonds and it will sit there because there is no internal capacity,” she added.
The acting Director-General said Nigeria was ready for Green Bonds, noting that bond issuance was not a new thing.
She, however, assured issuers and investors of transparency and proper monitoring of Green Bonds proceeds against specific projects when it hits the market.
Ms Justine Leigh-Bell, Director, Market Development, Climate Bonds Initiative (CBI), said total Green Bonds issuance in 2017 stood at 155 billion dollars.
Leigh-Bell explained that projects eligible for Green Bonds financing were renewable energy, pollution prevention, green buildings, clean water, energy efficiency and climate change adaptation, among others.
She said the organisation would help Nigeria to train and prepare issuers on Green Bonds financing.
Bola Onadele, FMDQ Managing Director, said the company had formalised its partnership with the Financial Sector Deepening (FSD) Africa and CBI to support the development of the Nigerian Green Bond Market.
Onadele said the Nigerian Green Bond Market Development Programme was a direct offshoot of the partnership, which would span for three years.
He explained that the partnership would facilitate the establishment and development of a Green Bond market in Nigeria as well as support the guidelines and listing requirements.
