Getting Specific with Green Bond Investments

One of the major challenges green bonds are faced with globally is a lack of convergence on what projects are ‘green’ to demonstrate social-environmental accountability. On one hand, ‘green’ is relative; it varies between individuals, countries, and even amongst environmentalists. On the other hand, ‘greenness’ depends on the objectives of the bond market that are based on coherent long-term climate and sustainable development priorities of the market/country.

Unfortunately, certain bonds markets/countries have had to face this unwholesome reality of the market. For instance, the EDF Group, which provides home and business energy in the U.K., operates nuclear power plants as a green project in France and Britain and recently issued a €1.4 billion green bonds towards nuclear energy. However, this investment has raised concerns about how really green nuclear power investments are. In one way, carbon emissions might be low with such power plants, but nuclear wastes have been criticised for being capable of emitting dangerous radioactive that pollute the environment in some way, for thousands of years after it is no longer useful.

In as much as Nigeria seems headed in the right economic and environmental direction with the recently introduced Federal Government Green Bonds Initiative, it is important that the thrust of the initiative is rightly captured from the beginning, to ensure its success.

One of the ways the Nigerian green bonds initiative can indeed provide the much needed environmental and climate benefits, together with providing an economic revamp, is by mapping out country-specific green bonds investments. Apart from guiding against ‘green washing’ (a situation where money raised for promoting green growth is used for projects perceived as non-green) or controversies associated with economic investments, mapping out country-specific green bonds investments is another means to achieving sustainable development.

In order to guide against similar outcomes and to kick-start a booming green bonds market, China issued country-specific rules on green bonds in 2015. The Green Bond Guidelines and the Green Bond Endorsed Project Catalogue set out important requirements on disclosure and use of proceeds to ensure a transparent and robust green bond market. These guides provide localised but specific direction for green investments in this leading green bond market.

Although the Nigerian Federal Ministry of Environment has provided Green Bond Guidelines (GBG) to guide the issuance, disclosure, management and utilisation of green bonds and their proceeds, there is still need for provision of a more detailed and documented Nigerian-specific standards/catalogue. The current GBG addresses the use of proceeds, project eligibility, management of proceeds, and reporting yet, it does not detail the specific projects bonds should address, as learnt from the Chinese context. A specific standard/catalogue of projects is different from an ordinary guideline as it provides more detailed criteria, requirements, and projects to be addressed; it takes a step above identifying/specifying investment sectors, to providing sector specific and country priority green projects. A country’s GBG may identify energy efficiency or clean transportation as eligible green projects but a standard/catalogue will provide, define, and detail categories and specific emissions performance criteria. In the case of China, ‘Clean Transportation – through the construction of railway, urban rail transit and clean fuel production units, and promotion of new energy vehicles, to reduce GHG emission and pollutant discharge intensity’ and *serve 100 million inhabitants.  ‘Energy Saving – through constructing high efficiency facilities and conducting energy-saving improvement, to reduce energy/ water/ raw material consumption per unit product or service, lower pollutants and GHG (e.g. CO2) emissions generated from resource consumption, and achieve resource conservation, GHG emission reduction and pollutant alleviation’ (Green Bond Endorsed Project Catalogue). However, all these are structured according to the country’s specific environmental, economic, and social needs.

In the case of Nigeria, energy, agriculture, transport, and environment have been identified as key sectors to benefit from green proceeds with energy efficiency, resource efficiency, renewable energy, clean technology, and sustainable forest management as the eligible Green Projects categories identified by the Federal Ministry of Environment. Nevertheless, specific eligible but priority projects of concern should also be concisely documented with reachable targets.

Though specific eligible projects must be determined in consultation with stakeholders, there is need for the prioritisation of certain green projects in the identified sectors, considering Nigeria’s pressing environmental, social, and economic needs, as well as the country’s capacity:

Energy and Environment: As rightly identified by the government, projects in the renewable energy sector should be priority for a developing economy and energy-short nation as Nigeria is and especially with the present global energy and climate concerns. Nonetheless, there should be a clear renewable investment focus from the proposed green bond. Apart from Solar which seems to be receiving considerable attention in the country, hydro and wind energy should also be given more attention in the green proceeds. Resource and energy efficiency can be derived from investments in them.

With the natural resource of the Kanji, Jebba, Shiroro and the Mambilla dams for instance, Nigeria should maximise capacity to conveniently generate more energy than the about 19% of hydropower potential the nation still taps. (Global Energy Network Institute, 2014).

Moreover, an assessment of 10 locations in Nigeria about a decade ago; reflects that average wind speeds are between 4-5m/second at 30metres height and at 5-6m/second at 80metres height (Lahmeyer International’s study, 2005). This moderate speed of wind is said to be capable of generating huge supply of energy provided these potential remains with recent changes in climate.

Furthermore, in achieving resource efficiency, recycling is a major strategy. Through recycling and reuse of industrial and agricultural wastes, paper, as well as water; Nigeria can improve and save resources while minimising environmental dangers. Investment in and promotion of paper recycling for one, is crucial to conserving forest (trees) resources in the country. However, recycling benefits come with core investments in establishing recycling plants. Many states in Nigeria especially Lagos and Kano currently struggle with waste recycling and increasing volumes of daily waste.

Transport: One green project that has received attention from the green bond proceeds of several markets is the development of rail systems. Nigeria’s mega cities of Lagos and Abuja are long overdue for modern and green railway transportation/urban rail transit. Construction and operation of rail transit and light rail, should receive first attention in the disbursement of green proceeds whilst eco-friendly road systems are hugely invested in. It is deplorable that several Nigerian roads have not only become death traps but also, triggers of pollution.

Eco-friendly roads reduce emissions and at the same time promote energy and resource efficiency. As much as the country’s present capacity is not capable for an introduction of electric transport system, constructing eco-friendly corridors in form of cycling routes are effective ways of reducing emissions from congested roads. In addition, the use of less energy-consuming road construction materials such as interlocking, bio-binders recycled industrial by-products and the likes should be researched, explored and made priority.

Agriculture and Forestry: Afforestation, forest tending and conservation, eco-agriculture, animal husbandry and fishery, as well as strengthened agricultural infrastructure construction are practical ways to attain resource/energy efficiency and sustainable forest management.

Agriculture is capable of expanding the economic base of a nation through highly mechanised production, industrial processing, packaging, and marketing of consumable products. The present administration has demonstrated interests in agricultural investments as ways of revamping and improving the economy thus, the inclusion of the agricultural sector in green proceeds is a cogent necessity. However, smart-agriculture is the means to achieving a sustainable agricultural sector in the country.

Halting deforestation, using clean technology (modern information and communication technologies) to increase the quantity and quality of agricultural production should be made priority in channeling green bonds towards the agricultural sector. This is because hitherto these aspects of the sector have been hindered because they require sophistication and investments yet to be made.

Likewise, as forests have become a good source of modern and clean energy, projects relating to forestry breeding and seedling production, underwood planting and breeding as well as afforestation should be given priority for sustainable forest management.

Although a step in the right direction in an increasingly environmentally conscious world, it is important that the Federal Government Green Bonds Initiative is indeed, a means to fulfilling Nigeria’s Nationally Determined Contributions (NDC), an economic revamp strategy, as well as a means to attaining sustainable development. However, the first step is getting our specific priorities right.

Nevertheless, whatever country specific standards/catalogues are finally decided on should be harmonised with international standards to guide against inter-country or inter-continent green bonds market clashes.


*Pseudo figure


Adebayo C. (2014), How is 100% Renewable Energy Possible for Nigeria: Global Energy

Network Institute Newsom C. et. al. (2012), Renewables Energy Potential in Nigeria: International Institute for Environment and Development, assessed on


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