Infrastructure gap: SEC to invest in green bonds

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By Onyeka Ajumobi Onochie

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The Securities and Exchange Commission (SEC) has said that the nation’s huge infrastructure gap could be addressed with investments in sustainable finance initiatives such as Green Bonds.

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Acting Director-General of SEC, Ms Mary Uduk, stated this in Lagos during the launch of green Bond issuance rules recently. She noted that Green bonds were created to fund projects that have positive environmental and/or climate benefits.

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According to Uduk, majority of the green bonds issued are green use of proceeds, or asset-linked bonds. She said: “Proceeds from these bonds are earmarked for green projects but are backed by the issuer’s entire balance sheet.

“There were urgent needs to close the huge infrastructure gap with investments in green bonds, since issuance of the bond would provide an avenue to raise capital in the market to finance the country’s infrastructure needs, enhance liquidity, as well help deepen the market.

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“Green Bond is one of such avenues to raise needed capital from investors with a passion for keeping our environment clean and investing the proceeds in environmentally friendly and green infrastructure initiatives.”

On effective utilisation of proceeds, she said the commission had robust monitoring and issue proceeds verification that tracked issuers and proceeds utilisation.

She said the verification process ensured that proceeds from the issue were directed and utilized for the projects they were earmarked for in accordance with the guidelines.

“SEC is engaging with stakeholders and capital market operators on various enlightenment and training programmes on Green Bonds. Specifically, since second quarter, SEC has collaborated multiple times with the Climate Bonds Initiative (CBI) to provide training for regulators, investors, and intermediaries on Green Bonds,” she stated.

She said SEC had rolled out rules on green bonds and conducted enlightenment programmes as part of its efforts to create an enabling environment for issuers and other stakeholders.

According to her, the commission will continue to encourage companies to take advantage of this tremendous opportunity.

“It is a new area and we will continue to develop capacity in the green bond market both internally at the SEC and the market as a whole.

“We have organized trainings for regulators and continued to work with experts and organisations to further strengthen capacity in this area,” Uduk said.

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