SEC launches Green Bonds Issuance Rules

SEC launches Green Bonds Issuance Rules

Monday, December 3, 2018 6:34 pm

Dealers at the Nigerian Stock Exchange

The Securities and Exchange Commission (SEC) on Monday officially launched the Green Bonds Issuance Rules to support the development of a Non-Sovereign Green Bond market in Nigeria.

Ms Mary Uduk, SEC Acting Director-General, said in Lagos that the launch followed series of engagements with stakeholders and capital market operators on Green Bonds Rules released by the commisison on Oct. 12.

Green bonds were created to fund projects that have positive environmental and/or climate benefits.

Majority of the green bonds issued are green “use of proceeds” or asset-linked bonds. Proceeds from these bonds are earmarked for green projects, but are backed by the issuer’s entire balance sheet.

“As Nigeria strives to harness the resources of non-oil sectors to anchor the transition to a more resilient economy, there is urgent need to close the country’s infrastructure gap with investments in sustainable finance initiatives.

“The SEC’s release of the green bond rules is a significant step in furthering the complementary efforts of the government, regulators and the financial services industry to direct financial capital to more sustainable economic activity,” Uduk said.

Also commenting on the rules, Dr Evans Osano, the Director of Financial Markets at FSD Africa, commended SEC Nigeria for the professional and quick turnaround in the preparation of the guidelines.

Osano said that the new guidelines were prepared in line with leading international guidelines and standards providing confidence to domestic and international investors.

He said that the rules would provide certainty to issuers of green bonds in Nigeria.

“FSD Africa is pleased to have supported this process which is a milestone for the Nigeria green bonds market”, Osano said.

Also, Mr Olumide Lala, Africa Markets Programme Manager, Climate Bonds Initiative, said that the launch of the rules would bring much needed clarity and guidance on the issuance of green bonds.

“Adopting the tenets of the Green Bond Principles and Climate Bonds Standard makes it easier to attract foreign investment where needed,” Lala said.

SEC has collaborated on several occasions on Market Development Programme, a programme supported by the Climate Bonds Initiative(CBI) and the FMDQ OTC Securities Exchange (“FMDQ”).

It was also supported by the Financial Sector Deepening Africa (FSD Africa) to support the development of a Non-Sovereign Green Bond market in Nigeria.

The programme provides training for regulators, investors and intermediaries on Green Bonds as part of its efforts to create an enabling environment for issuers and other stakeholders, to take advantage of the tremendous opportunities that Green Bonds offer.

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