March 21, 2019

SEC Urge Investing in Green Bonds As Solution to Infrastructure Challenges

SEC Urge Investing in Green Bonds As Solution to Infrastructure Challenges

 

 

The Securities and Exchange Commission has called for Nigeria to use more green bonds to facilitate its infrastructural needs. The acting Director-General, Ms. Mary Uduk, pointed out the country’s infrastructure deficit would hit $878 billion by 2040 and should, therefore, work more to close this gap going forward.

She made the statement Sunday at the 2018 annual workshop organized by the Capital market Correspondents Association of Nigeria, CAMCAN in Lagos.

At the workshop, she also said the commission would continue to promote an active, enabling, and regulative environment for the issuance of green bonds.

 

‘The future holds opportunities for renewable energy, energy efficiency, infrastructure, food, agriculture and the task ahead is to ensure funds are channeled to green projects with multiple socio-merits,’ Uduk said.

 

She encouraged more domestic investment in green bonds as this would help Nigeria come out on to a better place from its infrastructure, power and energy, transportation and environmental challenges.

 

Uduk, who was represented by Head, Registration, and Market Infrastructure Department, SEC, Mr. Emomotimi Agama, said that it was necessary for Nigeria to stand at the forefront of innovations and initiatives.

 

She said that the second tranche of green bonds which had been issued presented an opportunity for the country to solve its infrastructural deficit.

 

‘The biggest opportunity, to my mind, which green bond issuances will present, is the potential to solve Nigeria’s infrastructural deficits, improve agriculture and alleviate poverty while also protecting the environment. It is a multi-faceted strategy,’ she said.

 

Also speaking, the Managing Director, FMDQ OTC Securities Exchange, Mr. Bola Onadele said that 155 billion dollars had been realised from the green bonds issuance, thereby gaining the attention of investors.

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Onadele who was represented by Senior Vice President, Economic development division at the Exchange, Mr. Emmanuel Etaderhi said that the country’s resources were not growing in tandem with the rising population.

 

He said that the reason for Nigeria’s woeful performance in the power and energy sector was due to its inability to tap into energy utilisation from the sun like other European countries.

 

According to him, the challenges affecting green bonds include a low level of local participation in green bond verifiers, lack of investible projects, cost of verification and lack of understanding on the part of key investors.

 

‘Green bond investors enjoy waivers relating to tax and in the next 15 years, we will require $7 trillion in investments connecting sustainable finance to capital markets,’ he said.

 

He noted that the FMDQ had set a sustainable finance committee to engage private and public and will engage in a training partnership with FSD Africa and Climate Bond Initiative, CBI.

 

 

Commenting further, Director, Climate Finance Advisor, CBI, Dr. Jubril Adeojo, said that green bonds were made for Africa and with the deficits seen in major sectors of the economy.

 

Adeojo stated that green bond opportunities were enormous, noting that the nation would focus more on renewable energy, hybrids to reduce the consumption of fossil fuels.

 

The News Agency of Nigeria, NAN reports that the workshop was themed: Exploring Green Bond market for economic growth.

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