Nigerian green bonds issuance to rise as Agusto named verifier
The dearth of green bonds that has been witnessed in Nigeria is set to be reversed following the appointment of Augusto & Co as an Approved Verifier. Agusto & Co, the leading Pan-African Credit Rating Agency with operating offices in Nigeria, Kenya and Rwanda, is one of the three companies to be certified as an Approved Verifier by the Climate Bonds Standard Board to perform verification of green bonds, projects and assets in Africa, the company announced recently.
“As an Approved Verifier, Agusto & Co. will be able to quickly assess projects of companies and government (including states) under the Climate Bonds Standard criteria for various sectors as we have the technical expertise and local presence,” the Chief Executive Officer, Mrs Yinka Adelekan, said while responding to enquiries by Daily Trust on Sunday.
“This will facilitate the uptake and quick issuance of green bonds by companies and government in Nigeria (and in Africa) as well as promote sustainable and best environment-friendly practices that align with the United Nations Sustainable Development Goals (SDGs) and the Paris Climate Agreement, for which Nigeria is a signatory,” she added.
Nigeria has not performed well on the issuance of green bonds. To date, only the federal government and two other entities (Access Bank Plc and North-South Power Company Plc) have raised certified green bonds. Part of the challenge associated with issuing green bonds has been the knowledge gap and availability/access to a limited pool of foreign Verifiers to conduct an assessment on projects/assets/instruments eligibility under the Climate Bonds Standards, said Adelekan.
“Now that Agusto & Co has become an Approved Verifier, we will try to bridge the knowledge gap through our advocacy and social work and ultimately support companies and governments who have the potential to comply with the SDGs and Paris Climate Agreement,” Adelekan assured.
In this capacity, Agusto & Co. will be able to assess projects under the Climate Bonds Standard criteria for Solar, Wind, Marine, Geothermal, Bioenergy, Recycling, Forestry, Buildings, Water, Waste, Transport, Agriculture & Shipping sectors and issue preissuance and post-issuance verifier reports. Agusto & Co will provide knowledge and also serve as a reference point for quick verification of projects in Africa, from its three operating offices – Nigeria, Kenya and Rwanda, the CEO said.
Adelekan believes Agusto & Co. will draw from its experience of 30 years in the domestic capital market, plus its strong local presence in Nigeria, Kenya and Rwanda and robust sectoral skill set, “to provide
support for issuers who intend to raise funds for environment-friendly projects at a significantly lower cost when compared to foreign counterparts.”
“Also, as part of our advocacy, we will be championing the development of green finance and sustainable investments in Africa as we collectively seek to rescue our continent from the adverse impact of climate change,” she explained.
According to Agusto, verification by an Approved Verifier is mandatory in the certification process. Certification is also available for bonds, loans or other debt instruments which have already been issued or closed. In these cases, issuers only need to meet the Post Issuance Requirements of the Standard. Issuers can apply for certification at any time while the debt instrument is outstanding, the company explained.
Access Bank in March 2019 blazed the trail among Nigerian lenders in the issuance of green bonds with its N15 billion Green Bond, which was fully subscribed. The proceeds of the issuance were used to build environmental resilience, deliver on clean energy, and foster sustainable use of land.
North South Power Company Limited also issued a N8.50bn 15.60 percent 15-year Fixed Rate Senior Green Infrastructure bond.