Capital Market Key to Infrastructure Financing, Says Balogun

The Group Chief Executive Officer of Chapelhill Denham Group, an investment banking group, Mr. Bolaji Balogun, has said that the capital market has an integral role to play in the area of bridging infrastructure deficit in housing, education, roads and power among others.

Bolaji stated this at the roundtable session of the Sustainable Finance Subcommittee (SFS) set up by the FMDQ OTC Securities Exchange under its Debt Capital Market Development (DCMD) project in Lagos.

The SFS, which is the fifth lever of the overall DCM Transformation Structure, will focus on entrenching sustainable finance principles and concepts into the Nigerian capital market. To achieve this, the sub-committee will examine key issues which have been globally recognised as critical elements of sustainable finance such as impact investing, green bonds, microfinance, credits for sustainable projects, active ownership, financial inclusion among others. After the launch of the SFS, an investors/issuers roundtable session, was organised in collaboration with the Climate Bonds Initiative (CBI). Speaking at the session, Bolaji said that at the very minimum, Nigeria should be aiming to build over about 20,000MW of power, which requires huge financing commitment. According him, over the next decade, the country will need to invest over $200 billion in power alone, which therefore creates a significant opportunity for renewables. He stated that everywhere across Nigeria’s National Infrastructure Masterplan is an opportunity to use sustainable finance, and significant amongst these is the social infrastructure, with one of the projects being developed by the Presidency- “the energising education project”- a central project that Nigeria’s green bond will be used to finance, which seeks to provide solar power to universities across Nigeria. “To consolidate all these efforts, we need to get the debut sovereign green bonds concluded very quickly, get a sub-national to debut corporate green issuances and subsequently a number of repeat issuances in the market, a process which requires three key elements- engagement with key regulators, buy-side education, engagement with potential subnationals and corporate issuers to encourage frequent issues,” Balogun said.

In her, presentation titled: ‘Green Bonds- an opportunity for Nigeria’, the Director for Business Development, Climate Bonds Initiative, Ms. Justine Leigh-Bell pointed out that with green bonds, 100 per cent of the proceeds are used to finance eligible projects and assets with environmental, social and governance benefits. She stated further that the global green bonds market is a global market that is growing exponentially.