NGX Fosters Sustainable Financial Products Associated with Climate Change

With sustainable finance gaining momentum globally, governments and corporate issuers are paying increasing attention to environmental, social and governance (ESG) factors, and investors, regulators and other stakeholders are encouraging more robust ESG practices.

As the sustainable Exchange championing Africa’s growth, Nigerian Exchange Limited (NGX) is committed to playing an enhanced role in facilitating the financing of a sustainable future.

Being a member of the Sustainable Stock Exchange Initiative (SSE) since 2013, NGX has a long-standing commitment to foster the growth of sustainable finance in Nigeria. The Exchange recognises the critical need to drive sustainable finance as a tool to accelerate progress towards the achievement of the Sustainable Development Goals (SDGs) and combat climate change and its impact as enshrined in the Paris Agreement on Climate Change.

NGX has shown strong commitment to sustainable finance over the years. In 2016, NGX conceptualised and developed the green bond product paper, which was embraced and championed by the Debt Management Office (DMO) and the Federal Ministry of Environment. This effort led to the issuance of the maiden N10.69 billion ($25.8 million) 13.48 per cent 5-year green bond in 2017 to fund projects to develop renewable energy. The second tranche, N15 billion ($36.1 million) 14.5 per cent 7-year Green Bond was issued in June 2019 and was over-subscribed.

The sovereign issuance paved way for the emergence of corporate green bond market with N15 billion, 15.5 per cent five-year fixed rate senior unsecured green bond by Access Bank and N8.5 billion, 15.6 per cent 15-year guaranteed fixed rate senior green infrastructure bond by North South Power Company.

On 15 April 2021, North South Power Company (NSP) issued its second N6.33 billion ($15.3 million) 10-year 12 per cent Fixed Rate Series 2 Senior Green Bonds due 2031, bringing the size of the Green Bond market to N55.52 billion. It is noteworthy that all the corporate and sovereign Green Bonds are listed on NGX.

NGX continues to work with leading market stakeholders to build the capacity of existing and potential corporate green bond issuers on green bond issuance process and reporting best practices and also working closely with the Federal Ministry of Environment and Debt Management Office on the issuance of the third Sovereign Green Bond in Nigeria. “We are pleased to continue our collaboration with globally recognised institutions such as IFC and CBI to share valuable experiences and best practices on green finance, and promote the development of a sustainable finance market across our ecosystem”.