FG links sovereign green bond to resurgent infrastructure devt

The planned African Sovereign Green Bond, which is the first of its kind, is perceived as possible measure to effectively address climate change, sustainable environmental concern and infrastructure development.

The Minister of Power, Works and Housing, Mr Babatunde Fashola, who, last week, stated that the benefits derivable from the project would facilitate a new economy and help the government to source funds to implement its budget, especially in infrastructure development.

Fashola, while responding on the initiative during the Green Bonds Capital Market & Investors Conference organised by the Federal Ministry of Environment and the Debt Management Office (DMO) at the Nigerian Stock Exchange (NSE) House in Lagos, said the fund, which,  would be directed to fighting climate change, would enable government realise its renewable energy projection.

The minister, who noted that one of the challenges that has stalled development in the country over the years was the lack of sufficient infrastructure spend added, however, that going forward the Green Bond would help government to source funding to implement its budget.

“So, that is how it affects us; it is a source of funding for budget.

“When the Bond is finally issued, the decision as to who gets what and what goes where would be the responsibility of the Ministry of Finance. However, I need to say that my Ministry needed as much money as it could get to continue to upgrade and build new infrastructure in Power, in Works and in Housing.

“You can see the justification from what the Acting President, Professor Yemi Osinbajo and the Minister of the Environment said that the first launch of this Bond is only looking to a size of about N20 billion to test the market because there are so many things to do,” Fashola said.

“But the ultimate decision as to who gets what is the responsibility of the Ministry of Finance. But we need as much money as we can get to continue to upgrade and build new infrastructure in power, in works and in housing,” he added.

According to the minister, “N20 billion is the first issuance in naira; but this is the first Sovereign Bond in the whole of this continent, so I expect that they want to enter the market very conservatively and see what the appetite is and from there ramp up,” adding that over the last one and a half decades, the entry threshold of government into capital market had been very modest but had grown severally.

Assuring that the proposal to achieve 30 per cent renewable energy by 2030 was realistic, Fashola declared, “It is extremely realistic; it is based on very extensive consultations, it is based on our current realities, it is based on what we expect is realistically achievable.

“Yes, I said 30-30-30, it is 30 per cent in 2030 and these things are not unconnected with our current realities also and one of our realities is that we signed the Paris Agreement and the Paris Agreement has thresholds and nationally determined contributions that we have made as a country that we would achieve in terms of reducing Green House gases, Green House emissions and so on and so forth,” he said.

In his contribution at the conference earlier, during the ministers’ dialogue with the theme, “Ensuring Sustainability of Green Bonds,” Fashola advocated that the concept of the Sovereign Green Bond and its components of climate change must be taken to the street level to enable Nigerians understand and connect with it adding that it would also make implementation of the environmental projects easy among the people.

“The first thing to do is to bring all that we do here to the street level. It must get to the street level otherwise it becomes a very esoteric discussion that people on the streets don’t understand and can’t connect to,” the minister said, adding that the people should be made to understand why they should or should not take some actions.

He added, “I say this in the context of my own personal experience; each year we tell the people ‘don’t use firewood’, don’t do this, don’t do that and the question then is ‘what would they do to survive?’ So, in very simple terms, we must put this in the hands of the people.