Nigeria plans to raise 20 billion naira ($63 million) by March to help fund renewable energy projects, the first issuance of so-called green bonds in West Africa’s biggest economy.
“We are on track to sell the bond in the first quarter, a sovereign, and could have another by the end of the year,” Environment Minister Amina Mohammed said in an interview Friday in the capital, Abuja. The sale will also help fund an electric-vehicle commuter project in the city and tree-planting in the country’s arid north, she said.
Nigeria, Africa’s most-populous nation with 180 million people, needs more than 6 trillion naira, the equivalent of almost its entire annual budget, to plug its infrastructure deficit, according to information from the Budget and National Planning Ministry. The government increased its 2016 budget by 20 percent, allocating one-third to projects including roads, rail, ports and bridges, to stimulate an economy battered by a drop in oil production and that’s projected by the International Monetary Fund to contract by 1.7 percent this year.
“The exchequer can’t get all the money we need,” Mohammed said. “That’s why we must leverage these innovative ways to get funds from the international community.”
Finance Minister Kemi Adeosun said this week the nation will issue its third Eurobond, worth $1 billion, in January.
Mohammed said her ministry is targeting off-grid solar-power projects producing as much as 1,200 megawatts in the country’s north. Nigeria’s electricity generation capacity is about 6,000 megawatts, according to the power ministry. South Africa, whose population is a third of Nigeria’s, has a capacity of more than 40,000 megawatts.
Proceeds from the green bonds will also support environment-friendly projects in the oil-producing Niger River delta, where the government aims to eliminate gasflaring by 2019, Mohammed said.
There are also plans to continue the cleanup of the Ogoniland oil spills, she said. Royal Dutch Shell Plc, Shell’s Nigerian Unit, SPDC, Exxon Mobil Corp., and Eni SpA’s Agip Oil Co. have paid $1 billion, of which $200 million will be disbursed annually, to help with cleaning up oil spills as old as 50 years in the Ogoni district in the southern Niger River delta.