Advancing the Federal Government of Nigeria’s Climate Change Initiative: Debt Management Office announces its second Sovereign Green Bond, designating 220% subscription level

The Debt Management Office (“DMO”) has declared the effects of its second Sovereign Green Bond offering for N15 billion. The Offer, which presented to the general public on Monday, June 3, 2019, and closed on Monday, June 10, 2019, was preceded by roadshow meetings with investors and other stakeholders in Lagos and Abuja.

The results of the second Sovereign Green Bond issuance revealed increased knowledge and awareness of Green Bonds by subscribers, and perhaps also demonstrated a greater level of commitment from the general public towards protecting the environment. The total value of subscriptions received was N32.93 billion, representing 220% of the N15 billion offered. Similarly, the number of subscribers doubled when compared to the figure for the first Sovereign Green Bond issued in December 2017. Retail investors were not left out, as the number of individuals who subscribed for the second Sovereign Green Bond more than doubled. The number of subscriptions grew by almost 201% with the share of total subscriptions rising to 1.43% compared to 0.67% for the 2017 Sovereign Green Bond. The stronger participation of retail investors shows that financial inclusion and deepening of the domestic financial market, which are some of the key objectives of the DMO in its issuance activities, are being achieved.

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Whilst the Offer was oversubscribed, the DMO allotted only the N15 billion that was offered for a tenor of 7 years, at a coupon of 14.50% p.a.

The proceeds of the Green Bond will be used to finance projects in the 2018 Appropriation Act, which will contribute to Nigeria’s commitments to the Paris Agreement on Climate Change. The projects include Off-Grid Solar and Wind Farm, Irrigation, Afforestation and Reforestation, as well as, Ecological Restoration.

Assisting the DMO with this landmark offering were the financial advisors, Chapel Hill Denham Advisory Limited, Capital Assets Limited, Rand Merchant Bank Nigeria Limited and Stanbic IBTC Capital Limited.

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