Lagos State prepares for historic green bond issuance


The Lagos State Government is preparing for the issuance of an NGN 25bn ($60m) green bond under the Nigerian Green Bond Market Development Programme (NGBMDP). State Governor Babajide Sanwo-Olu signed an MoU towards the issuance with the NGBMDP’s implementing partners, FMDQ Holdings and Financial Sector Deepening (FSD) Africa this week.

The NGBMDP was launched in 2018 by FMDQ, FSD Africa and the Climate Bonds Initiative to support the growth of Nigeria’s non-sovereign debt capital market. It notably supported the development and issuance of Nigeria’s Green Bond Issuance Rules by the country’s Securities and Exchange Commission (SEC) in November 2018 and provided technical support to several issuers.

Nigeria was the first nation to issue a sovereign certified climate bond back in 2017, followed by several of its companies. In 2019, Access Bank issued the first Climate Bonds Initiative (CBI)-certified corporate green bond in Africa, raising N15.0 billion. The 5-year, 15.50% fixed rate bond was fully subscribed. The same year, North South Power Company, through the NSP-SPV PowerCorp PLC, issued its Series 1 N8.5 billion Green Bond, which was the first certified corporate green bond and the longest tenured (15 years) corporate bond issued in the Nigerian debt capital markets approved by the SEC.

Lagos State is about to become the first issuer of a subnational green bond in Nigeria as it seeks to diversify its financing sources and support sustainable development across the state. On September 10th, its national long-term rating was upgraded to AAA by Fitch Ratings, while its LTR, STR and local currency long-term issuer default ratings were affirmed B.

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