The Debt Management Office (DMO) on Monday announced plans to raise up to N50 billion through the issuance of its Series III FGN Green Bond, aimed at financing climate-friendly projects with climate change adaptation and mitigation initiatives to receive the largest allocation of N15.96 billion.
Patience Oniha, director-general of the DMO, made this known Monday, during the official launch of the green bond held in Lagos. “We are gathered here for what is both an investor meeting and the official launch of the third sovereign green bond Series III. It is worth noting that this is our first issuance since February 2019. After the first two rounds, we took a deliberate pause. When you do something new, it’s important to step back, evaluate, and apply the lessons learned. That’s exactly what we’ve done. I’m pleased to say that we are returning to the market stronger and better prepared,” she said.
A breakdown of the spending plans for the FGN Series III Green Bond shows that N15 billion will be allocated to clean energy transition initiatives, including the development of local infrastructure, conversion to CNG, and electric vehicles. The construction of three earth dams—Kalgo, Maiyama, and Bunza – will receive N9.3 billion, while N6 billion has been earmarked for the construction of the Dange Earth Dam. Additionally, N1.075 billion will go toward the rehabilitation and upgrading of the Buruku/Gboko Water Supply Project.
The offer, which is being arranged by Chapel Hill Denham Advisory Limited and Stanbic IBTC Capital Limited as financial advisers, will be issued in the form of fixed-rate notes with a tenor of five years.
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According to details released by the Debt Management Office (DMO), the proceeds of the bond will be deployed to fund eligible green projects as outlined in the Appropriation Act. These projects, selected by the Federal Ministry of Environment and the Federal Ministry of Water Resources, are intended to support Nigeria’s efforts in combating climate change and promoting environmental sustainability.
The Series III Green Bond will be issued in Nigerian Naira and will represent direct, unconditional, general, and unsecured obligations of the Federal Government. The notes will rank ‘pari passu’ with all other existing unsecured and unsubordinated obligations of the government.
The issuance has received a second-party opinion from Agusto & Co, affirming the alignment of the bond with international green financing principles.
Investors can subscribe with a minimum investment of N10 million, and thereafter in multiples of N1 million. The book-build price guidance is yet to be disclosed.
Upon issuance, the bond will be listed on the Nigerian Exchange Limited’s Sustainable Instruments Market (Impact Board) and/or the FMDQ Securities Exchange Green Exchange. Clearing and settlement will be handled by the Central Securities Clearing System (CSCS).
The bond will be governed by the laws of the Federal Republic of Nigeria, with full principal repayment scheduled at maturity.
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This marks the third issuance in Nigeria’s green bond series, reinforcing the government’s commitment to sustainable development and the global climate agenda.
Responding to journalists immediately after the official unveiling, Oniha said, “We’re here to present the DMO’s plans to issue a N50 billion sovereign green bond. Usually, when we’re introducing products like this as we did with the Sukuk and the previous green bond, we need to engage directly with investors.”
The debut Green Bond was well received by investors and oversubscribed, with total subscriptions of N10.79 billion, representing 101 percent of the offer. The second Green Bond also attracted strong investor interest, recording N32.93 billion in subscriptions at 220 percent of the offer.
“Today’s session is to inform them about the amount, the tenor, and, very importantly, what we plan to do with the money. On issuing another bond, she said, “Our borrowings are based on the budget, so this particular issuance is within the available fiscal space for now. But yes, we do plan to issue more. As I mentioned, this is tied to global environmental policy commitments, and Nigeria remains committed to those. Our goal is to issue more green bonds consistently, not just one or two.”
