By Nse Anthony-Uko
(Sundiata Post) — FMDQ Over The Counter Securities Exchange (FMDQOTC) in partnership with Climate Bonds Initiative (CBI) and Financial Sector Deepening Africa (FSD Africa) will be spearheading a three year Nigerian Green Bond Market Development Programme as part of efforts to create awareness and drive education required to integrate the principles of green financing into the Nigerian DCM, thereby facilitating the establishment and development of the green bond market in the country.
The Programme is expected to support the development of guidelines and listing requirements for green bonds in Nigeria, develop a pool of Nigeria-based licensed verifiers to support issuers, facilitate engagement with extant and potential issuers and investors, and support broader DCM reforms that will have an impact on the non-government bond market in Nigeria.
Commenting on the partnership, Director, Market Development, Climate Bonds Initiative, Ms. Justine Leigh-Bell, said “we are very excited about this significant milestone. Working with FMDQ and FSD Africa will provide a platform to open up the Nigerian economy to a wider investor universe as we commence our journey to deepen the local capital markets by entrenching financing instruments such as green bonds.”
She stated that development of green bonds will help address environmental challenges as well as plugging the infrastructure gap. On his part, Director, FSD Africa, Dr. Evans Osano, said “this partnership will provide the opportunity to work closely together in developing Nigeria’s debt capital markets through the Nigerian Green Bond Market Development Programme as it is expected that this Programme will improve access to a complementary source of longer-term capital, alongside traditional, shorter-term bank loans, while also contributing to the financing of ‘green’ investments and improving the environment.”
The Managing Director and Chief Executive of FMDQOTC, Mr Bola Onadele Koko reiterated the advantages of issuing green instruments to help tackle some of the infrastructural challenges in Nigeria. Stating that FMDQ, as an OTC Exchange with a passion for developing the Nigerian DCM, was excited and optimistic that its pursuit to develop a Nigerian green bond market, in partnership with reputable institutions such as FSD Africa and CBI, he said it would help address infrastructure gaps and environmental challenges in a sustainable manner to deliver prosperity for Nigerians.
In March 2018, the three parties had formalised a partnership, which stemmed from the growing global recognition of the role sustainability plays in strengthening financial stability and supporting overall economic growth in a nation, through the signing of a Cooperation Agreement, to support the development of the Nigerian green bond market for a period of three years.
The partnership is aimed at, among other things, enabling the OTC Exchange garner the necessary support required to promote impact investing as entrenched under the sustainable finance pillar in the FMDQ Debt Capital Markets Development (DCMD) Project, and at providing the necessary tools to allow the OTC Exchange continually pursue an economic development agenda to reposition and organise the Nigeria DCM to access a global pool of long-term climate-related capital.