TheCable

The Debt Management Office (DMO) says the federal government will issue a green bond to finance the 2023 budget.

The development is coming more than four years after the government issued its last green bond.

Patience Oniha, director-general, DMO, made this known at the annual conference of the Capital Market Correspondents Association of Nigeria (CAMCAN) over the weekend in Lagos. 

The DMO boss said the federal government is looking at ways to finance capital projects and alternate funding sources for the N10.78 trillion budget deficit, hence the planned issuance of the green bond.

Green bonds are fixed-income, liquid financial instruments used to raise funds dedicated to climate mitigation, adaptation and other environment-friendly projects.

Oniha also said green bond issuance was part of the government’s debt strategy in 2023, although major details such as size and time have not been concluded.

She added that the government had raised N25.59 billion through similar green bonds between December 2017 and June 2019 to fund seven projects, including renewable energy, afforestation, agriculture, water and transportation.

Meanwhile, the government intends to finance the budget deficit mainly by new borrowings totalling N8.80 trillion as well as N206.18 billion from privatisation proceeds and N1.77 trillion drawdowns on bilateral/multilateral loans secured for specific development projects/programmes.

Last month, the DMO said it raised N3.3 trillion from the domestic market to help finance the 2022 budget deficit.