For a while now, the federal government, through the Ministry of Environment, has been emphasising on the need to join the global race to have a ‘Green Economy’ as part of efforts to cushion the effects of climate change.
Minister of Environment Amina Mohammed (centre) and her co minister Ibrahim Usman Jibril (left) with the Director General of Debt Management Office, Dr. Abraham Nwankwo during the public private advisory meeting in Abuja recently
With this intent, many projects have been proposed to help in going green and one of the instruments accepted by the ministry in partnership with Ministry of Finance is investment in Green Bonds.
Recently the Green Bonds initiative received a boost with the holding of the Public Private Advisory Group meeting on it where issues on how to take the steps needed to issue Nigeria’s first sovereign green bond were raised. The meeting, which was headed by the Minister of Environment, Amina Mohammed and her co-minister, Ibrahim Jibril Usman, and the Minister of Finance, Kemi Adeosun, was in consultation with experts and key actors aimed at coming up with key requirements in the issuance of green bond come March this year.
The federal government is to commit the sum of N20 billion for the pilot green bond on the date, with the second issuance later in the year.
Speaking to journalists on what the investment on green bonds will mean to the ordinary Nigerian, the minister said the project would be designed in a way that it will bring better benefits to the environment and the people.
She explained that the air that the people breath, the environment that they live in are impacted by climate change, adding that the things that are making those things happen are emissions that are released into the air – whether it is from gas flaring or exhaust from cars, all of these contribute to global warming.
“The projects are to try to reduce the global warming and benefit Nigerians. They are also to give them jobs so it is not just a question of we want to do green, no, it is that green that will relate to bettering your lives in terms of your health, environment and also because many Nigerians will get jobs,” she stressed.
Green bonds, according to experts, have financial benefits as they could be used to support the portfolios of commercially viable projects, which could provide a revenue stream that could offset the bond.
This reflects the objective of the sovereign green bond as a catalyst for other forms of investments, to demonstrate that projects are capable of providing a return to investors.
The green bond project criteria aimed at benefiting the people will be segmented into different developmental projects; Transportation, Renewable energy, Energizing education programme, Great Green Wall and Deforestation.
This project is estimated to cost N11 billion in two years as it is designed to provide 100 BRT buses for mass transit routes between the Central Area district and Zuba with the prospect of extension to Suleja.
The analysis is that the BRT buses project will contribute to the reduction in emissions by reducing the number of cars on the roads.There will also be emissions benefits from the buses using regenerated brakes which will reduce the amount of energy needed to power the engines. Also, the use of electronic ticketing will also have a contribution by eliminating paper in the provision of that service.
The minister explained that instead of many people having their vehicles on the road, pumping out emissions that are affecting people’s health and the environment, they decide to put the BRT buses that will not use diesel but electric or other cleaner fuel. The minister said they (BRT vehicles) will be reducing emissions.
The BRT buses, she said, will have their routes with the necessary infrastructure, adding “so what it means is that not only the road will be dedicated but it will be speedy; that means your productivity will be better. When you get up in the morning you will reach Abuja quickly and when you leave in the evening you will get home quickly because the road is free, because it is just for the buses.”
She explained that along the route, where they are picking passengersthere are facilities and jobs will be given to people to better their lives.
According to the template of the project, it will involve a combination of an operational pilot scheme in Sherape and rural electrification needs set out in the Federal Ministry of Power. Under the project, about 45 communities will be powered using a viable revenue model and smart meters installed in the communities and a secure payment mechanism.
The minister said considering the challenges of gas power and electricity in the country now, they have to find another way, and that is to use solar power.
Energizing education programme
This project is estimated to cost N100 billion. It is a rural electrification initiative that seeks to develop off grid independent power plant type projects for the generation and provision of adequate power in 37 federal universities and seven University Teaching Hospitals across the country. The project also includes the provision of street lighting to illuminate the campuses for security and training centres at each federal university.
According to the analysis by the experts, the programme will be focused on the use of renewable energy alternatives to provide power at the identified institutions.
With the innovative skills already figured out by the Ministry of Power, Mohammed said the first thing is to see what can be done on the funding.
“That means our tertiary institutions for the first time will have uninterrupted power, our students are going to learn with some ease; we are not going to use fossil fuels to power our universities and that is the green projects,” she said.
Great Green Wall and deforestation
This project which is estimated to cost N2.83billion, aims to increase forest coverage through the planting of seedlings to cover 131,000 hectares of land. It will help reduce net emissions and work towards achieving the objectives of Nigeria’s INDC while also supporting the livelihoods of rural communities.
Executing the GGW and afforestation projects, according to the minister, is because it will focus on giving impetus to climate change mitigation; so that climate change will be reduced; give jobs and make the environment cleaner.
“We want to plant trees that have economic value which means there will be fruits and will produce the biofuels.There is reason for you to protect them; the trees do two things,they stop desertification and give you jobs and market,” she said.
On the issue of funding the project, the minister stated that figures have been put forward, saying, “Our intention is for the federal government to issue a sovereign green bond to the value of N20 billion. We are establishing a framework for issuing money in bonds to certain types of projects that will better the environment and give jobs.This is the pilot programme.”
She said they want to make sure that as Nigerians they have the capacity in the partnership in the public and private sectors to put the projects together to get the funding and to be successful.
“That success will get us more money from the Nigerian capital market and also from the international capital markets, so there is more than we want to do green projects, we want to leverage more money and more investors to come into Nigeria, which means more jobs and a better economy,” she stated.
While maintaining that the success of green bonds will bring in other projects, she maintained that for the issuance of the bonds, March is very feasible because they have pruned the budget.
BY: Chidimma C. Okeke