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(Bloomberg) — Nigeria plans to sell $186 million of green bonds in two offerings before the end of the year as it seeks to fund an ambitious economic-transformation plan, Environment Minister Balarabe Abbas Lawal said.
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A 50 billion-naira ($31 million) bond will be sold in two weeks and an additional 250 billion-naira one in October, Lawal told reporters in the capital, Abuja, on Wednesday. The government expects them both to be oversubscribed, he said.
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There’s also a plan to issue a green dollar bond next year, Lawal said, without elaborating. The debt will fund projects such as water security, green mass transportation and clean energy, he said.
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Africa’s top crude exporter is diversifying its economy to reduce its reliance on the fuel and reach net zero emissions by 2060. Oil accounts for at least 80% of Nigeria’s export earnings and a recent slump in prices has put its budget forecasts in jeopardy.
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With Nigeria’s 2025 budget benchmarked at an oil price of $75 per barrel and the sectors break-even price close to $50 per barrel, “it will likely continue to heighten concerns for the country’s growth, fiscal and external accounts,” Ayodeji Dawodu, head of Africa research at BancTrust & Co. Investment Bank, said in a note Wednesday.
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Brent crude traded up 0.2% at $62.25 per barrel at 1:53 p.m. in London.
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Africa’s most-populous country has issued at least two previous green notes.
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Yields on Nigeria’s 15 billion naira of green bonds due 2026 have dropped more than 200 basis points to 19.72% from a February high of 21.87%. The six-year bonds were issued in 2019 with a coupon of 14.5%, with proceeds to be used for solar-energy infrastructure.
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—With assistance from Robert Brand.
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(Updates with size of debt offering from first paragraph.)
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English (US)