..signals investor confidence in Nigeria’s climate agenda
The federal government’s latest sovereign green bond issuance drew strong demand from investors, closing with ₦91.42 billion in total subscriptions. This is 183% of the ₦50 billion offered, and highlights growing market appetite for sustainable debt instruments in Africa’s most populous economy.
The Debt Management Office (DMO) announced the results of the offer on Thursday, as it confirmed that the third green bond issuance by the federal government attracted widespread interest from institutional investors and the domestic capital market.
“Investors again demonstrated their confidence in the Federal Government of Nigeria (FGN) Securities by the high level of subscription of ₦91.42 billion recorded in the recent Sovereign Green Bond Offer,” the DMO said in a statement.
The offer closed on Wednesday, June 18, 2025, with a total allotment of ₦47.355 billion at a coupon rate of 18.95% per annum.
Despite offering ₦50 billion in bonds, the government opted for a slightly smaller allotment, an approach, analysts say, reflects prudent debt management and pricing discipline amid broader macroeconomic adjustments.
“The strong investor interest in this green bond demonstrates growing confidence in Nigeria’s commitment to sustainable financing,” Patience Oniha, Director-General, DM, said.
“Green Bonds are becoming an increasingly important instrument for mobilising capital towards our climate objectives and sustainable development agenda.”
Proceeds from the issuance will finance projects listed in the 2024 Appropriation Act that align with Nigeria’s Nationally Determined Contributions (NDCs) under the Paris Agreement, including initiatives aimed at climate adaptation, energy transition, and reforestation.
Nigeria has pledged to reach net-zero emissions by 2060, a target that will require significant private and public capital flows into green infrastructure.
This marks its third sovereign green bond issuance since becoming the first African country to issue such an instrument in 2017.
The inaugural ₦10.69 billion bond focused on renewable energy and afforestation, followed by a second issuance of ₦15 billion in 2019. The latest round significantly expands the scale and ambition of Nigeria’s green finance strategy.
The DMO has consistently emphasised the dual role of green bonds as not just a tool for environmental financing but also a vehicle for deepening the domestic capital market.
In this issuance, Chapel Hill Denham and Stanbic IBTC Capital Limited served as financial advisers, book runners, and issuing houses. This reflects a broader trend of local investment banks building expertise in ESG-linked instruments.
“The Green Bond is yet another contribution of the DMO towards the deepening of the domestic capital market and the DMO remains committed to this objective,” the agency said.
The oversubscription comes at a time when Nigeria is contending with fiscal pressures from fuel subsidy reforms, exchange rate adjustments, and broader monetary tightening.
Yet the success of the green bond points to a strong reservoir of investor trust in Nigeria’s sovereign debt, particularly when tied to transparent, sustainability-linked outcomes.
As global capital increasingly shifts toward Environmental Social and Governance (ESG) and climate-aligned investment mandates, the success of this issuance could lay the groundwork for more structured green and blue bonds, not just in Nigeria but across West Africa.
Experts say the next phase will be ensuring that project selection, monitoring, and impact reporting remain rigorous, key criteria for Nigeria to maintain credibility with both domestic and international investors.
They see DMO’s proactive strategy of diversifying funding sources through sustainable instruments to continue, particularly as multilateral agencies, climate funds, and foreign institutional investors seek scalable African green projects to support.
