Access Bank Plc in a corporate disclosure to the Nigerian Stock Exchange this week said it has applied for the admission of a N15 billion green bond on the Luxembourg Stock Exchange (LuxSE).
The unsecured climate-credential bond, which was first listed on the NSE and the FMDQ OTC Securities Exchange last year, has a 15.50 percent fixed rate over a five-year maturity period (2019-2024). But the paper will not be traded on the Luxembourg stock exchange, the lender said.
At the time of listing on the local bourse, the unsecured green bond was described as the first-ever climate bond standard certified corporate green bond to be issued in Africa.
“With our pace-setting experience in mainstreaming of sustainability in our business operations, we are confident that this green bond will further help in supporting environmentally friendly investors to meet their investment objectives,” said Herbert Wigwe, Group Managing Director of Access Bank.
The sustainable security would also simultaneously support the bank’s customer towards realizing growth opportunities in the fast-developing low carbon economy, the Group MD added.
More so, the bond would further deepen the domestic debt capital market by increasing the range of investible debt securities in the markets, invariably contributing to Nigeria’s development, according to Tumi Sekoni, FMDQ director on Capital Markets.
Successful admission of the bond to the official list of the Luxembourg bourse would make the lender the first company to cross-list a green bond on both exchanges since the NSE and LuxSE announced a partnership on sustainable financing in October last year.
About green bonds
Similar to traditional corporate and public treasury bonds, green bonds have an additional social and sustainable feature that allows the financing of climate change projects with positive social spin-offs. The sustainable finance instrument was introduced some ten years ago.
Over the years, trading in green bonds has developed into a practical solution to environmental problems, bringing together investors, development experts, policymakers and scientists towards achieving a common goal. In the first half of 2019, investor interest in green bonds grew rapidly with $86 billion raised worldwide — a 26 percent increase in the same period the previous year.
Meanwhile, the journey of sustainable finance (green bonds) in Nigeria began with the launch of the first Sovereign Green Bond by NSE, in partnership with the Federal Ministry of Environment, Federal Ministry of Finance and the Debt Management Office.
Proceeds from the instruments are used for investment in eco-friendly projects, contributing essentially to meeting the United Nations Sustainable Development Goals (SDGs).