FG Unveils N300bn Green Bond Plan to Support Economic Diversification, Climate Goals

The Federal Government has announced plans to issue green bonds worth ₦300 billion before the end of 2025 to finance key infrastructure and environmental projects under its broader economic transformation and climate-resilience agenda.

Minister of Environment, Balarabe Abbas Lawal, disclosed the plan during a press briefing in Abuja on Wednesday, confirming that the green bond programme will be executed in two tranches.

The first issuance, valued at ₦50 billion ($31 million), is scheduled in the coming weeks, while a second, larger issuance of ₦250 billion is expected in October.

“We have the European Union involved, we have the World Bank involved, we have the Ministry of Finance and the Debt Management Office involved,” Lawal said. “I want to assure you that both issuances will be oversubscribed.”

According to the Minister, proceeds from the bond sales will be channelled into sustainable development projects including water security, green mass transportation systems and clean energy infrastructure.

The government is also considering issuing a dollar-denominated green bond in 2026, although further details were not provided.

The green bond programme aligns with Nigeria’s long-term objective to achieve net-zero carbon emissions by 2060.

As Africa’s largest crude oil exporter, Nigeria is increasingly under pressure to diversify its revenue base and reduce reliance on fossil fuels.

This latest bond strategy is also viewed as a response to current fiscal pressures, particularly amid falling oil prices.

Brent crude traded at $61.67 per barrel at 4:00 p.m. in London on Wednesday, well below Nigeria’s 2025 budget benchmark of $75 per barrel.

Analysts have warned that this disparity could further strain Nigeria’s growth trajectory and fiscal outlook.

“With Nigeria’s budget break-even oil price near $50 per barrel, the current price environment will likely continue to heighten concerns for the country’s growth, fiscal, and external accounts,” said Ayodeji Dawodu, Head of Africa Research at BancTrust & Co. Investment Bank.

Nigeria has a modest track record in the green bond market. The country issued its debut green bond in 2017 and followed with a second issuance in 2019.

The outstanding ₦15 billion green bond maturing in 2026—initially issued to fund solar power, wind energy, forestry, and irrigation projects—has seen yields decline from a February high of 21.87% to 19.72%.

The upcoming offerings are expected to deepen Nigeria’s sustainable finance market and provide alternative sources of funding for critical public sector investments.

The involvement of multilateral institutions such as the World Bank and EU is expected to enhance credibility and investor participation.

Market analysts anticipate strong demand for the issuances, citing Nigeria’s improving green bond performance and the global shift toward ESG-compliant assets.

The Debt Management Office is expected to provide additional guidance on timelines and investor participation criteria in the coming weeks.

With rising debt servicing costs and a shifting energy landscape, the green bond strategy is seen as both a fiscal necessity and a structural shift in the government’s approach to financing national development priorities.