Lagos Signs N25 billion Green Bond Financing Deal
Governor Babajide Sanwo-Olu of Lagos State
Lagos state has signed a N25 billion (or $60 million) deal with the FMDQ Group and Financial Sector Deepening (FSD) Africa to finance infrastructure and other key projects to spur its growth.
The agreement with the implementing partners on the proposed N25 billion financing option, makes Lagos State the first sub-national government to activate the framework for the unlocking of the $1 trillion Nigerian Green Bond Market Development Programme for financing of key infrastructure projects.
On Tuesday, Governor Babajide Sanwo-Olu signed the MoU with all the parties under the supervision of the State Attorney General and Commissioner for Justice, Moyo Onigbanjo, at an historic event witnessed by the British Deputy High Commissioner, Ben Llewelly-Jones.
The event held less than 24 hours after Lagos was upgraded to AAA(nga) rating from AA+(nga) by Fitch International for the State’s good standing on debt sustainability and resilience.
The green bond programme is being supported by the UK Agency for International Development (UK Aid) and it is expected to raise the capacity of the state government to deliver more key infrastructure and social projects that would keep Lagos on the path of prosperity.
Launched in 2018, the Green Bond Market Development Programme is to facilitate development of a green bond market to support broader debt capital markets reforms that will impact the sovereign and non-sovereign bond markets in the country.
The programme is to empower state governments to champion sustainable finance for development.
The MoU is the crucial first step being taken by Lagos towards creating viable financing option for future green and sustainability projects.
The funding opportunity, according to the governor, will advance adoption of innovation and technologies to provide green jobs, thereby promoting economic and climate resiliency.
“As a Government, we are committed to utilise our limited resources more efficiently to create a circular economy, which is a promising and viable alternative. Public spending and investments may not be enough to deliver our key objectives; therefore, the need to tap into more private investments for the transition to a zero waste and circular economy, as well as achieving crucial items of the Sustainable Development Goals (SDGs).
“I strongly believe that the Green Bond programme will open the doors of deep sustainable funds for infrastructure and social development for Lagos. Being the biggest player in the sub-national capital market, Lagos’ experience can open new doors for a lot of others. As a State, we embrace the transparency and commitment that comes with a Green Finance framework. We believe it sends an important signal to investors in the market about who we are: a State that is fiscally responsible, prudent and disciplined.”
Lagos’ credential in investment sustainability spurs the state into taking the bold step to activate the framework to benefit from the programme.
Lagos Commissioners for: Economic Planning and Budget, Mr. Sam Egube; Finance, Dr. Rabiu Olowo; Managing Director/Chief Executive Officer, FMDQ Group, Mr. Bola Onadele. Koko; Lagos State Governor, Mr. Babajide Sanwo-Olu; British Deputy High Commissioner in Lagos, Mr. Ben Llewellyn-Jones; Special Adviser to the Governor on Sustainable Development Goals (SDGs) & Investment, Mrs. Solape Hammond; Commissioner for the Environment and Water Resources, Mr. Tunji Bello and Attorney General & Commissioner for Justice, Mr. Moyo Onigbanjo (SAN), during the signing of the Lagos State Green Bond Issuance Memorandum of Understanding (MoU) at Lagos House, Marina, on Tuesday, September 14, 2021.
He said the initiative would go a long way in ensuring that key deliverables in his administration’s T.H.E.M.E.S agenda are actualised, while pledging that the State would continue to blaze the trail of leadership, financial accountability, innovation and sustainability.
Special Adviser to the Governor on SDGs and Investment, Solape Hammond, said the journey to get the framework approved started last year, disclosing that the MoU highlighted key projects to be delivered by the State Government to actualise economic sustainability.
She said the finance would be invested on green projects, adding the implementing partners had created a mechanism to ensure funds earmarked were disbursed judiciously.
Commissioner for Finance, Rabiu Olowo, said Lagos had 20 years experience in raising bonds, assuring implementing partners and capital market operators of the State’s commitment to the terms highlighted in the framework.
Chief Executive Officer of FMDQ Group, Bola Onadele, said Lagos had built reputation and “incredible potential” for catalysing broad-based sustainable development, which explained the partners’ readiness to support the State in unlocking the capital to fund key projects.
He said: “ I have no doubt that the implementation of this MoU and the impact thereof will ensure that Lagos continues to set itself apart, support its developmental aspirations and highlight its sustainability efforts at the global green and sustainable finance ecosystem. We are excited about this opportunity to support the developmental aspirations of Lagos.”
Also, FSD Africa CEO, Mark Napier, saluted the Governor’s energy and his commitment towards providing infrastructure which future generations can rely on.
He said: “It’s truly a significant event that the economic powerhouse of Africa’s largest economy is signing the green bond investment and I can say this is leadership being demonstrated by the Lagos State Government. I expect other States to follow this path.”
